Revolve (RVLV) Stock Forecast & Price Target

Revolve Group Inc. demonstrated a strong financial performance in Q4, achieving a 14% year-over-year growth, with domestic sales rising approximately 11% and international sales growing by 29%. The active customer base increased to 2.668 million, reflecting a 5% year-over-year growth, which surpassed street expectations, indicating solid customer engagement and acquisition progress. Looking ahead, management has guided for improved gross margins in both the first quarter and fiscal year 2025, projecting margins of 52.2%-52.7% and 52.4%-52.9%, respectively, both exceeding market expectations and indicating operational efficiency.

Revolve Group Inc. reported a significant decline in free cash flow, with approximately $18 million in 4Q, marking a 54% year-over-year decrease due to unfavorable working capital investments despite a rise in net income. The company's gross margins showed mixed performance, as the REVOLVE segment slightly missed forecasts at 54.6%, while its FWRD segment outperformed expectations at 40.1%, suggesting inconsistency in profitability across different segments. Furthermore, a decline in average order value (AOV) by 1% year-over-year, coupled with the potential for stagnating top-line and member growth, raises concerns about Revolve's future earnings potential and overall financial stability.