Revolve Group (RVLV) AI Stock Analysis

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Revolve Group

(NYSE:RVLV)

Rating:72Outperform

Price Target:

$22.00

▲(0.73%Upside)

Revolve Group's strong financial performance and promising earnings call, driven by robust sales growth and strategic investments, are the primary strengths. However, technical indicators and valuation concerns present risks, particularly with high P/E ratio and bearish momentum signals.

Positive Factors

Customer Trends

Despite the tariff impacts, the underlying performance of Revolve Group has been strong with encouraging customer trends, lower return rates, and cost optimization.

Retail Expansion

Physical retail expansion is expected to boost market share and engagement by increasing brand visibility and customer acquisition.

Technology and Innovation

AI investments are expected to continue driving growth, enhancing customer engagement and retention, and reducing return rates.

Negative Factors

China Import Exposure

The company has mid-teens direct import exposure to China, which remains a risk due to high tariffs.

Sales Trends

Quarter-to-date performance shows slowing trends, with softening sales and increased markdowns impacting average order value.

Tariff Impacts

Tariffs and markdowns are expected to pressure the company's gross margin.

Revolve Group (RVLV) vs. SPDR S&P 500 ETF (SPY)

Market Cap

$1.55B

Dividend YieldN/A

Average Volume (3M)1.60M

Price to Earnings (P/E)31.1

Beta (1Y)2.01

Revenue Growth9.09%

EPS Growth106.50%

CountryUS

Employees1,632

SectorConsumer Cyclical

Sector Strength73

IndustrySpecialty Retail

Share Statistics

EPS (TTM)0.16

Shares Outstanding40,370,308

10 Day Avg. Volume1,180,724

30 Day Avg. Volume1,595,116

Financial Highlights & Ratios

PEG Ratio1.23

Price to Book (P/B)2.87

Price to Sales (P/S)0.00

P/FCF Ratio62.79

Enterprise Value/Market Cap0.68

Enterprise Value/Revenue0.24

Enterprise Value/Gross Profit1.76

Enterprise Value/Ebitda6.62

Forecast

1Y Price Target

$22.15

Price Target Upside1.42% Upside

Rating ConsensusModerate Buy

Number of Analyst Covering15

Revolve Group Business Overview & Revenue Model

Company DescriptionRevolve Group, Inc. operates as an online fashion retailer for consumers in the United States and internationally. The company operates in two segments, REVOLVE and FWRD. It operates a platform that connects consumers and global fashion influencers, as well as emerging, established, and owned brands. The company offers women's apparel, footwear, accessories, and beauty styles under established and emerging brands, as well as owned brands. It also provides various luxury brands. The company was formerly known as Advance Holdings, LLC and changed its name to Revolve Group, Inc. in October 2018. Revolve Group, Inc. was founded in 2003 and is headquartered in Cerritos, California.

How the Company Makes MoneyRevolve Group generates revenue primarily through the sale of its fashion and lifestyle products via its e-commerce platforms. The company's key revenue stream is direct-to-consumer sales, facilitated by its proprietary technology and data-driven approach to inventory management and customer engagement. Revolve leverages social media and influencer collaborations to enhance brand visibility and drive traffic to its online stores. Additionally, the company benefits from strategic partnerships with a variety of brands, allowing it to offer exclusive or limited-edition items that attract and retain customers. Revolve's business model emphasizes efficient inventory turnover and a high level of customer service, contributing to strong repeat purchase rates and customer loyalty.

Revolve Group Key Performance Indicators (KPIs)

Any

Total Active Customers

Total Active Customers
Shows the number of unique customers who made purchases, signaling market reach, customer retention, and growth potential.

Chart InsightsRevolve Group's total active customers have shown consistent growth since 2021, reflecting successful customer acquisition strategies. The recent earnings call highlights a 14% increase in Q4 net sales, driven by strong international demand and operational efficiencies. Despite challenges in the luxury segment and temporary sales impacts from wildfires, Revolve's focus on AI technology and brand expansion positions it well for continued growth. The company's strategic priorities and improved margins suggest resilience and potential for further customer base expansion.

Data provided by:

Main Street Data

Revolve Group Earnings Call Summary

Earnings Call Date:May 06, 2025

(Q1-2025)

% Change Since: 15.31%|

Next Earnings Date:Jul 30, 2025

Earnings Call Sentiment Positive

Revolve reported strong financial results with significant growth in net sales and operating cash flow. The company successfully executed marketing initiatives and improved inventory dynamics while continuing to invest in technology and AI. However, they face tariff challenges and macroeconomic uncertainties, impacting average order values and consumer sentiment. Despite these challenges, Revolve remains confident in its long-term strategies.

Q1-2025 Updates

Positive Updates

Strong First Quarter Financial Performance

Revolve reported a 10% year-over-year increase in net sales, with domestic net sales up 9% and international net sales up 12%. Operating income grew by 57% year-over-year, and adjusted EBITDA increased by 45%.

Increased Operating Cash Flow

The company generated $45 million in operating cash flow during the first quarter, increasing their cash position by $44 million, with cash and cash equivalents exceeding $300 million.

Successful Marketing Initiatives

REVOLVE Festival in Coachella Valley led to a 40% increase in press impressions and a 25% increase in social media impressions year-over-year with reduced spending.

Improved Inventory Dynamics

Inventory decreased by 7% compared to year-end 2024, with the net sales growth outpacing inventory growth. The mix of owned brand net sales as a percentage of REVOLVE segment net sales increased year-over-year for the first time in 2.5 years.

Continued Investment in Technology and AI

Revolve is leveraging AI for customer service improvement and product discovery, including AI algorithms for call transcriptions and a new AI-powered styling feature.

Negative Updates

Tariff and Macroeconomic Uncertainty

Revolve faces challenges due to significant and broad-based tariffs, especially with 16% of inventory imported directly from China. The macro environment is uncertain with geopolitical issues.

Decrease in Average Order Value

Average order value decreased by 1% year-over-year, primarily due to a lower AOV in the FWRD segment driven by product mix.

Impact of Consumer Sentiment

U.S. consumer confidence has declined every month in 2025, reaching a 5-year low, affecting the company's internal revenue growth expectations.

Challenges in Canada

Weakness in the Canadian market due to boycotts of U.S. retailers in response to U.S. policy, impacting sales.

Company Guidance

During Revolve's First Quarter 2025 Results Conference Call, the company provided detailed guidance highlighting several key metrics. Revolve reported a 10% year-over-year increase in net sales, with domestic sales up 9% and international sales up 12%. The company's operating income rose by 57%, and adjusted EBITDA saw a 45% increase. They also achieved a significant milestone with $45 million in operating cash flow and cash and cash equivalents exceeding $300 million. The adjusted EBITDA margin improved by 160 basis points. Despite macroeconomic challenges, such as geopolitical uncertainties and tariffs, Revolve emphasized ongoing investments in AI technology, international expansion, and brand building. The company noted a decrease in product return rates by nearly 3 points year-over-year, contributing to operational efficiencies. Revolve maintains a strategic focus on expanding owned brands, with owned brand net sales increasing as a percentage of REVOLVE segment net sales for the first time in 2.5 years. Additionally, the company is advancing its physical retail strategy with a new store at The Grove in Los Angeles, slated to open in the fall. Despite a challenging environment, Revolve remains optimistic about its long-term growth opportunities.

Revolve Group Financial Statement Overview

Summary

Revolve Group exhibits a strong financial position with stable revenue growth, solid gross margins, and low leverage. However, there are opportunities for improvement in net profit margins and cash flow generation. The company's strong equity base and consistent revenue growth provide a solid foundation for future expansion, although enhancing cash flow efficiency will be crucial for sustaining long-term growth.

Income Statement

Positive

The company demonstrated solid revenue growth with a Revenue Growth Rate of 5.73% in 2024. Gross Profit Margin remained strong at 52.52%, although Net Profit Margin was relatively modest at 4.39%. The EBIT Margin improved to 4.55%, indicating better operational efficiency compared to previous years. Overall, profitability is stable but could benefit from further improvement in net margins.

Balance Sheet

Very Positive

The balance sheet is healthy, with a low Debt-to-Equity Ratio of 0.09, reflecting minimal leverage. The Return on Equity is reasonable at 11.32%, suggesting effective use of equity capital. The Equity Ratio is robust at 65.76%, indicating a strong equity base relative to total assets. The financial position appears stable with low reliance on debt.

Cash Flow

Positive

Operating Cash Flow to Net Income Ratio is 0.54, suggesting moderate efficiency in converting net income to cash. Free Cash Flow to Net Income Ratio stands at 0.42, indicating room for improvement in cash generation. Free Cash Flow growth was negative at -46.24%, reflecting potential challenges in cash flow generation, despite positive net income.

Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Breakdown
Income Statement		Total Revenue
1.13B	1.07B	1.10B	891.39M	580.65M
	Gross Profit
593.27M	554.20M	592.32M	489.82M	305.28M
	EBIT
51.42M	22.13M	73.14M	105.29M	61.07M
	EBITDA
56.58M	27.53M	77.93M	109.80M	65.89M
	Net Income Common Stockholders
49.56M	28.15M	58.70M	99.84M	56.79M
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
256.60M	245.45M	234.72M	218.46M	146.01M
	Total Assets
665.55M	608.89M	579.32M	480.41M	305.75M
	Total Debt
40.73M	40.99M	24.50M	6.94M	0.00
	Net Debt
-215.87M	-204.46M	-210.22M	-211.51M	-146.01M
	Total Liabilities
227.76M	223.75M	199.75M	163.40M	105.69M
	Stockholders Equity
438.19M	385.14M	379.57M	317.01M	200.06M
Cash Flow		Free Cash Flow
21.04M	39.14M	18.27M	60.12M	71.45M
	Operating Cash Flow
26.69M	43.34M	23.44M	62.31M	73.77M
	Investing Cash Flow
-9.11M	-4.20M	-5.17M	-2.19M	-2.32M
	Financing Cash Flow
-5.36M	-30.38M	887.00K	12.77M	8.66M

Revolve Group Technical Analysis

Technical Analysis Sentiment

Neutral

Last Price21.84

Price Trends

50DMA

20.23

Positive

100DMA

23.99

Negative

200DMA

26.41

Negative

Market Momentum

MACD

0.38

Negative

RSI

64.92

Neutral

STOCH

89.54

Negative

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For RVLV, the sentiment is Neutral. The current price of 21.84 is above the 20-day moving average (MA) of 20.23, above the 50-day MA of 20.23, and below the 200-day MA of 26.41, indicating a neutral trend. The MACD of 0.38 indicates Negative momentum. The RSI at 64.92 is Neutral, neither overbought nor oversold. The STOCH value of 89.54 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Neutral sentiment for RVLV.

Revolve Group Risk Analysis

Revolve Group disclosed 65 risk factors in its most recent earnings report. Revolve Group reported the most risks in the “Finance & Corporate” category.

Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy

Latest Risks Added 0 New Risks

Revolve Group Peers Comparison

Overall Rating

UnderperformOutperform

Sector (62)

Financial Indicators

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
VIPS	78 Outperform	$7.31B	7.39	19.00%	3.24%	-5.90%	-11.16%
MNSO	75 Outperform	$5.37B	15.66	24.98%	3.38%	9.80%	-6.33%
RVLV	72 Outperform	$1.55B	31.07	11.97%	―	9.09%	106.50%
ASO	72 Outperform	$2.84B	7.46	21.14%	1.07%	-3.67%	-14.66%
ETSY	68 Neutral	$6.13B	42.76	-39.97%	―	2.18%	-32.87%
Sector *	62 Neutral	$6.93B	11.25	2.95%	3.88%	2.69%	-24.71%
W	47 Neutral	$5.51B	―	17.86%	―	-0.89%	46.62%

* Consumer Cyclical Sector Average

Performance Comparison

RVLV

Revolve Group

21.84

3.90

21.74%

VIPS

Vipshop

14.47

-1.26

-8.01%

Wayfair

44.92

-14.52

-24.43%

ETSY

Etsy

62.72

-3.50

-5.29%

ASO

Academy Sports and Outdoors

42.90

-11.59

-21.27%

MNSO

MINISO Group Holding

18.17

-3.03

-14.29%

Glossary

OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.

NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.

UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.

Disclaimer

This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.