Revolve Earnings: Near-Term Macro Headwinds Fail to Damp Our Optimistic View; Shares a Bargain

No-moat Revolve’s first-quarter results were aligned closely with our prerelease estimates. Moreover, a return to net sales growth in March and April bodes well for the company’s near-term prospects. Revolve continues to navigate a choppy macroeconomic environment, and we don’t expect it to return to double-digit sales growth until consumer discretionary spending improves, likely toward the end of 2025. However, its durable profitability, willingness to invest through the cycle, and enviable investment opportunities leave us ready buyers over a longer-term investment horizon. As we balance the mixed first-quarter results, time value, and reaffirmed guidance, we don’t expect to alter our $29 fair value estimate meaningfully.