What Happened?
Shares of online fashion resale marketplace ThredUp (NASDAQ:TDUP) jumped 37.9% in the afternoon session after the company reported a "beat and raise" quarter. Third-quarter earnings blew past analysts' EBITDA and revenue estimates. Despite reporting declines in revenue and active buyers, ThredUp provided an optimistic outlook as it raised full-year 2024 revenue and EBITDA guidance, signaling improved confidence in the near-term growth prospects.
The improved bottom line also reflects the continued focus on operational efficiency. Notably, the company highlighted the sale of Bulgaria-based Remix, a secondhand apparel company acquired in 2021. Zooming out, we think this was a decent quarter featuring some areas of strength but also some blemishes.
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What The Market Is Telling Us
ThredUp’s shares are extremely volatile and have had 57 moves greater than 5% over the last year. But moves this big are rare even for ThredUp and indicate this news significantly impacted the market’s perception of the business.
The biggest move we wrote about over the last year was 3 months ago when the stock dropped 52.6% on the news that the company reported second-quarter earnings results. Its full-year revenue guidance missed, and its revenue guidance for the next quarter fell short of Wall Street's estimates. Notably, management called out "challenges in both the U.S. and Europe." Overall, this was a mediocre quarter for ThredUp.
ThredUp is down 70% since the beginning of the year, and at $0.68 per share, it is trading 80.2% below its 52-week high of $3.44 from November 2023. Investors who bought $1,000 worth of ThredUp’s shares at the IPO in March 2021 would now be looking at an investment worth $34.00.
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