Revolve (RVLV) Stock Forecast & Price Target

Revolve Group Inc. demonstrated a robust fourth quarter with a 14% year-over-year growth in sales, surpassing the previous quarter's growth of 10%, indicating improved customer engagement and a strong full-price selling environment. The company's active customer base has grown to approximately 2.668 million, representing a 5% year-over-year increase, which exceeds market expectations. Furthermore, management has provided optimistic guidance for gross margins, projecting 52.2%-52.7% for the first quarter of 2025 and 52.4%-52.9% for the full year, both showcasing year-over-year improvements and reflecting the potential for notable margin enhancement going forward.

Revolve Group Inc. reported a significant decline in free cash flow, dropping approximately 54% year-over-year to around $18 million in the fourth quarter, primarily due to unfavorable working capital investments and rising inventory levels. The company's gross margin for the REVOLVE segment slightly missed expectations at 54.6%, decreasing by 56 basis points year-over-year, while average order value (AOV) also fell about 1% year-over-year to $301, undershooting market projections. If top-line growth stagnates and margins do not improve, estimates suggest that earnings per share could potentially fall to $0.40, indicating a negative outlook for the stock based on reduced financial performance metrics and market conditions.