By Dhirendra Tripathi
Investing.com – Poshmark (NASDAQ:POSH) stock traded 4% lower Friday after Stifel downgraded it to ‘hold’ with a target of $15.
Analyst Scott Devitt earlier had a ‘buy’ on the stock with a target of $19, according to StreetInsider. The stock fell to a low of $12 in the session so far.
Devitt said the company faces numerous growth challenges that may limit share price appreciation relative to other e-commerce ideas even as he acknowledged its positive attributes: asset-light model, 20%+ margin potential, and a highly engaged user base.
According to the analyst, Apple’s privacy changes have dampened the effectiveness of the company’s marketing investments, resulting in slower user growth and higher marketing costs while Poshmark’s international expansion is yet to materialize.
Initial market launches have fallen short of the management’s expectations as well as the assumptions underpinning Stifel’s model, the analyst wrote.
With no clear catalysts and a modest growth outlook, Devitt said they favored other names like Amazon (NASDAQ:AMZN), Etsy (NASDAQ:ETSY) and Shopify (NYSE:SHOP).
Poshmark reported its fourth-quarter numbers on March 22.
Net revenue grew 22% to top $84 million. Gross merchandise value, the value of all goods and services on an online platform, grew 27% to touch nearly $491 million.
In the current quarter, the company expects revenue to be $86 million-$88 million.