Shares of Poshmark (POSH) are down more than 7.5% in premarket trading Wednesday after the e-commerce company reported financial results for the fourth quarter and released the first-quarter forecast.
Poshmark reported Q4 net revenue of $84.2 million, up 21% YoY and topping the consensus estimates of $80.5 million. Gross merchandise value was reported at $490.8 million, up 27% YoY.
Adjusted EBITDA loss in the quarter came in at $4.66 million, compared to $4.2 million profit in the year-ago quarter and expected loss of $7.09 million.
For the first quarter, Poshmark expects revenue in the range of $86 million to $88 million and adjusted EBITDA loss in the range of $7 million to $9 million.
Despite a very unpredictable and volatile environment globally, we delivered our second year of Adjusted EBITDA profitability and positive free cash flow during our first year as a public company, said Manish Chandra, Founder, and CEO of Poshmark.
Raymond James analyst Aaron Kessler lowered the price target to $16.00 per share, down from the prior $29.00 following a guidance miss, although he remains positive on POSH shares due to:
1) a Large TAM that benefits from convergence of eCommerce, Social, and Resale; 2) Poshmark is a leader in social commerce with large and highly engaged user base; 3) our expectation of ~20% long-term growth; 4) expectation for 30-35% long-term Adj. EBITDA margins; 5) we believe valuation is attractive at current levels (~1x 2023 EV/revenues and ~1.4x Gross Profits vs. ~15% LT growth).
Stifel analyst Scott Devitt also lowered the PT to $19.00 per share (from $23.00) given slower than expected growth and continued uncertainty.
Devitt reiterated his view that POSH remains well positioned to benefit from several global market trends, including (1) growing eCommerce penetration in the apparel and resale categories, (2) the shift to secondhand and environmentally conscious consumption, and (3) rising consumer adoption of social eCommerce.
By Senad Karaahmetovic