On Thursday, ThredUp Inc. (NASDAQ:TDUP) received a reaffirmed Hold rating from analysts at Needham, following a discussion with the company’s CEO James Reinhart and CFO Sean Sobers at the 27th Annual Needham Growth Conference.
The meeting came after ThredUp announced a notable improvement in its U.S. business, including a 9% increase in revenue and an adjusted EBITDA margin greater than 6% in the U.S. market.
ThredUp’s positive performance was attributed to the company’s recovery from previous self-inflicted issues. The Needham analysts said "The self-inflicted wounds appear to be in the rearview mirror as promotions are driving customers to the marketplace and LTV to CAC metrics are strong."
Furthermore, they said "efficiencies are driving contribution margin higher, resulting in higher LTVs and providing the company with greater ability to invest in acquisition. We expect TDUP to continue to drive efficiencies driven by their investments in AI products and automation."
The analysts noted that the increase in contribution margin is leading to higher LTVs, which allows ThredUp more flexibility to invest in customer acquisition.
This is seen as a result of the company’s focus on operational efficiencies, which have been bolstered by investments in artificial intelligence products and automation.
Needham expects ThredUp to continue pursuing operational efficiencies, driven by the company’s technological advancements. These improvements are anticipated to support the company’s growth trajectory and enhance its competitive position in the marketplace.
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