What Happened?
Shares of online fashion resale marketplace ThredUp (NASDAQ: TDUP) jumped 7.2% in the afternoon session after the company reported second-quarter financial results that surpassed expectations and raised its full-year outlook.
The online resale platform announced revenue of $77.7 million, a 16.4% year-over-year increase that beat forecasts. Its loss per share of $0.04 also came in better than analysts expected. This performance stemmed from a record 74% jump in new buyers, while total active buyers and orders processed also increased significantly. Citing this momentum, management lifted its full-year revenue guidance to a range of $298 million to $302 million. In response to the strong quarter, Telsey Advisory Group maintained its 'Outperform' rating and boosted its price target on the stock.
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What Is The Market Telling Us
ThredUp’s shares are extremely volatile and have had 75 moves greater than 5% over the last year. In that context, today’s move indicates the market considers this news meaningful but not something that would fundamentally change its perception of the business.
The previous big move we wrote about was 1 day ago when the stock gained 8.2% on the news that markets rebounded following a sharp sell-off in the previous trading session as weaker-than-expected U.S. jobs data fueled investor hopes for a potential interest rate cut by the Federal Reserve.
The July Nonfarm Payrolls report revealed a gain of only 73,000 jobs, significantly below the 110,000 expected. Compounding the news, prior months' figures were revised downward by over 250,000 jobs. This data, indicating a cooling labor market, has led investors to dramatically increase bets on a September interest rate cut by the Federal Reserve, with the probability jumping to over 80% according to the CME FedWatch Tool. The prospect of lower borrowing costs typically stimulates economic activity and boosts consumer spending on non-essential goods and services, which directly benefits companies in the consumer discretionary space.
ThredUp is up 637% since the beginning of the year, and at $10.40 per share, has set a new 52-week high. Investors who bought $1,000 worth of ThredUp’s shares at the IPO in March 2021 would now be looking at an investment worth $519.75.
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