Jim Cramer breaks down Revolve's recent IPO and urges investors to wait for a pullback before getting in on the stock.
Shares of Revolve, the online retailing platform that debuted on the market at north of $25 per share Friday, have rallied more than $10 since going public. The stock closed Wednesday's session at $36.51, more than 45% higher than its first trade.
The millennial-focused company, which launched in 2003, has three digital marketplaces across three price points, including the higher-end Forward, the high-end Revolve, and the low-end Superdown. Revolve Group looks to offer more options than a specialty store while tailoring to customers more than a department store. The retailer uses technology for automated inventory management, pricing, and to predict fashion trends, Cramer noted.
Revolve grew active users by about 40% and revenue by 21.2% in the first quarter, he added. The e-commerce platform also boosted total orders by 39% and cash flow by 31%. Unlike most companies that go public, Revolve is already turning a profit, Cramer said. "In fact, they've been consistently turning a profit for years now. This is not your typical red-hot IPO that's all about revenue growth with no concern for earnings," he said. "The only negative is that their margins took a little hit in the first quarter, but that's because they rolled out their new, lower-price concept Superdown.""If [the stock] gets to the low $30s, you know what, just go buy some.
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