ThredUp (TDUP): Exploring Valuation After Volatile Share Price Swings in 2024

ThredUp (TDUP) shares have seen mixed movement lately, catching investor attention after a stretch of market volatility. With its year-to-date returns solidly in positive territory, many are weighing what comes next for this online resale platform.

See our latest analysis for ThredUp.

ThredUp’s share price has seen quite a journey in 2024, with momentum shifting rapidly from a bullish 532.62% share price return year-to-date to a sharper pullback in recent weeks. Despite a 24.76% share price gain over the past 90 days, a tougher past month has reminded investors of the volatility inherent in fast-growing online retailers. Even so, the 1-year total shareholder return of 1,036.16% still stands out, hinting at both the upside and risk perception that continues to shape sentiment around the stock.

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With ThredUp shares trading below analyst targets and double-digit annual growth rates fueling debate, the key question emerges: is this a genuine buying opportunity, or is the market already betting on continued outsized gains?

Most Popular Narrative: 31% Undervalued

With ThredUp’s narrative fair value sitting well above the last close, the platform’s long-term potential is coming under intense market scrutiny. Fresh drivers and catalysts for the business are emerging as the market recalibrates what is possible in the online resale space.

The closure of the de minimis loophole and the introduction of new tariffs are making fast fashion and new apparel imports more expensive. This increases the relative value proposition and attractiveness of secondhand platforms like ThredUp, which should support further customer acquisition and drive strong revenue growth.

Read the complete narrative.

Want a glimpse at the logic fueling this bold price target? Analysts underpin their valuation with projections of transformational margin growth and rapid revenue scaling, betting on a competitive edge strengthened by regulatory and consumer trends. Dive in to discover which headline financial levers make the numbers work.

Result: Fair Value of $13 (UNDERVALUED)

Have a read of the narrative in full and understand what's behind the forecasts.

However, rising acquisition costs and shifting consumer interest could slow ThredUp’s growth. These factors pose real challenges to the platform’s long-term bullish narrative.

Find out about the key risks to this ThredUp narrative.

Another View: Room for Doubt?

Looking at valuation through the market’s price-to-sales lens, ThredUp stands out as expensive. It trades at 4x sales compared to the US Specialty Retail industry average of just 0.4x and a peer average of 1x. The market could eventually pull ThredUp’s ratio closer to a fair ratio of 1.6x. Does this signal that investors are too optimistic, or does ThredUp truly warrant this premium?

See what the numbers say about this price — find out in our valuation breakdown.

Build Your Own ThredUp Narrative

If you think the story looks different after digging into the numbers yourself, there's nothing stopping you from testing your own thesis in just minutes. Do it your way

A great starting point for your ThredUp research is our analysis highlighting 4 key rewards and 2 important warning signs that could impact your investment decision.

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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.

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