ThredUp stock price target raised to $9 from $7 at Telsey

Investing.com - Telsey Advisory Group raised its price target on ThredUp Inc. (NASDAQ:TDUP) to $9.00 from $7.00 on Tuesday, while maintaining an Outperform rating on the online resale platform. The stock has delivered impressive returns, surging over 279% in the past year, with current analyst targets ranging from $7 to $10.

The price target increase follows ThredUp’s strong start to fiscal year 2025, which built on momentum from a solid finish to 2024. The company reported record revenue in Q1, with impressive gross margins of 79.4%, driven by mid-single-digit growth in active buyers and a 95% year-over-year increase in new buyers, its best performance ever in this metric. According to InvestingPro data, while the company maintains strong top-line growth of 8%, it remains unprofitable over the last twelve months.

Order volume grew in the mid-teens during the first quarter, and the positive trend continued into Q2, with April marking the strongest month for customer acquisition to date. The topline outperformance translated to better-than-expected gross margins and operating leverage, resulting in an adjusted EBITDA beat.

ThredUp issued second-quarter guidance modestly above expectations for revenue and EBITDA, and raised its full-year guidance just one quarter into fiscal year 2025. The company has reportedly seen minimal impact from broader retail headwinds, including tariff-related disruptions.

Telsey’s new $9 price target assumes a 3.3x multiple on the firm’s two-year forward sales estimate of $315 million, broadly in line with the current next-twelve-months multiple of 3.0x. Based on InvestingPro’s Fair Value analysis, the stock appears to be trading above its intrinsic value. Get access to 10+ additional ProTips and comprehensive financial analysis for TDUP and 1,400+ other stocks with InvestingPro.

In other recent news, ThredUp Inc. reported a strong financial performance for the first quarter of 2025, exceeding earnings expectations with an EPS of -$0.04 compared to the anticipated -$0.08. The company’s revenue also surpassed forecasts, reaching $71.3 million against the expected $65.62 million. This positive financial outcome was accompanied by a notable mid-single digit growth in active buyers and a 95% increase in new buyers, contributing to a mid-teen percentage rise in orders. Additionally, ThredUp’s April performance marked its most successful month for customer acquisition, further boosting investor confidence.

Telsey Advisory Group responded to these results by raising its price target for ThredUp shares to $7.00 from $6.00, maintaining an Outperform rating. This upgrade reflects the company’s robust adjusted EBITDA, which exceeded forecasts due to improved gross margins and efficient management of operating expenses. ThredUp also provided a promising second-quarter guidance, slightly exceeding market expectations for both revenue and EBITDA. In other developments, ThredUp’s 2025 Annual Meeting of Stockholders saw the election of three Class I directors and the ratification of the company’s independent registered public accounting firm for the fiscal year ending December 31, 2025.

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