Michael Karanikolas, Co-Chief Executive Officer of Revolve Group , Inc. (NYSE:RVLV), recently reported a series of stock transactions, involving significant sales of company shares. According to the SEC filing, Karanikolas sold shares over a three-day period, from November 20 to November 22, 2024, amounting to a total of $8.04 million.
The transactions included the sale of 60,327 shares at an average price of $33.33 on November 20, followed by the sale of 13,456 shares at $33.76. On November 21, he sold 62,032 shares at $34.70 and 26,021 shares at $35.03. The sales continued on November 22 with 69,930 shares sold at $35.19 and 1,533 shares at $35.72. These transactions were conducted under a Rule 10b5-1 trading plan adopted by MMMK Development, Inc., a company in which Karanikolas holds a stake and shares voting and dispositive power.
The report also noted the conversion of Class B common stock into Class A common stock on the same dates, although these conversions did not involve any monetary exchange.
In other recent news, Revolve Group Inc. reported a robust performance in the third quarter of 2024, with net sales reaching $283 million, marking a 10% increase from the previous year. The company's net income rose significantly to $11 million, or $0.15 per diluted share, compared to $3 million in the same quarter last year. Adjusted EBITDA also experienced an 85% growth, reaching $18 million.
Co-CEOs Mike Karanikolas and Michael Mente attributed this growth to improved logistics, a decrease in return rates, and strong performance in key categories such as Fashion Apparel and Dresses. Revolve's strategic investments in AI technology, international expansion, and marketing initiatives were also highlighted as drivers of its positive outlook.
Recent developments include a 20% growth in international sales, with a strong presence in the Chinese market, and plans to open a Revolve Holiday Shop and a flagship store by mid-2025. On the downside, the company's inventory levels were higher than desired, but alignment with sales growth is expected by Q4. Despite a slight projected decline in Q4 gross margin due to markdowns and freight costs, the company maintains a positive outlook, backed by a strong balance sheet and a focus on operational improvements.
InvestingPro Insights
The recent stock transactions by Revolve Group's Co-CEO Michael Karanikolas align with several key insights from InvestingPro. The company's stock has shown remarkable performance, with a 138.88% price total return over the past year and a 111.22% return year-to-date. This strong performance is reflected in the stock trading near its 52-week high, with the price at 97.66% of its peak.
However, investors should note that Revolve Group is trading at a high earnings multiple, with a P/E ratio of 60.99 and an adjusted P/E ratio of 77.87 for the last twelve months as of Q3 2024. This valuation suggests that the stock may be priced for high growth expectations.
An InvestingPro Tip indicates that the RSI suggests the stock is in overbought territory, which could explain the timing of Karanikolas's sales. Another relevant tip is that 6 analysts have revised their earnings downwards for the upcoming period, potentially signaling caution about future performance.
For investors seeking a more comprehensive analysis, InvestingPro offers 18 additional tips for Revolve Group, providing a deeper understanding of the company's financial health and market position.
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