ThredUp Inc. (NASDAQ:TDUP): Are Analysts Optimistic?

We feel now is a pretty good time to analyse ThredUp Inc.'s (NASDAQ:TDUP) business as it appears the company may be on the cusp of a considerable accomplishment. ThredUp Inc., together with its subsidiaries, operates an online resale platform in the United States. The US$994m market-cap company posted a loss in its most recent financial year of US$40m and a latest trailing-twelve-month loss of US$23m shrinking the gap between loss and breakeven. The most pressing concern for investors is ThredUp's path to profitability – when will it breakeven? In this article, we will touch on the expectations for the company's growth and when analysts expect it to become profitable.

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ThredUp is bordering on breakeven, according to the 6 American Specialty Retail analysts. They anticipate the company to incur a final loss in 2026, before generating positive profits of US$500k in 2027. Therefore, the company is expected to breakeven roughly 2 years from now. How fast will the company have to grow each year in order to reach the breakeven point by 2027? Working backwards from analyst estimates, it turns out that they expect the company to grow 78% year-on-year, on average, which is rather optimistic! Should the business grow at a slower rate, it will become profitable at a later date than expected.

Underlying developments driving ThredUp's growth isn’t the focus of this broad overview, however, take into account that by and large a high forecast growth rate is not unusual for a company that is currently undergoing an investment period.

Check out our latest analysis for ThredUp

One thing we’d like to point out is that The company has managed its capital prudently, with debt making up 32% of equity. This means that it has predominantly funded its operations from equity capital, and its low debt obligation reduces the risk around investing in the loss-making company.

Next Steps:

This article is not intended to be a comprehensive analysis on ThredUp, so if you are interested in understanding the company at a deeper level, take a look at ThredUp's company page on Simply Wall St. We've also compiled a list of key aspects you should further examine:

1. Valuation: What is ThredUp worth today? Has the future growth potential already been factored into the price? The intrinsic value infographic in our free research report helps visualize whether ThredUp is currently mispriced by the market.
2. Management Team: An experienced management team on the helm increases our confidence in the business – take a look at who sits on ThredUp’s board and the CEO’s background.
3. Other High-Performing Stocks: Are there other stocks that provide better prospects with proven track records? Explore our free list of these great stocks here.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.