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Water Tower Research

Research from Water Tower Research

Water Tower Research is a leading equity research firm that provides research on micro, small and mid cap companies.

Water Tower Research was founded by Wall Street veterans after witnessing a fundamental shift in the investment research industry with the result being a declining knowledge base among investors, a lack of awareness and a shrinking pool of fundamental research being conducted on companies across the small-cap and micro-cap spectrum. The same issues are now increasingly occurring in the mid-cap space. This sea change within the investment community is impacting not only the companies themselves but also current shareholders and potential investors. With significantly less active sell-side sponsorship by Wall Street, a substantial information gap has developed between companies and various constituents in the financial community. The net result is fewer channels for insight and information to flow between companies and investors.

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<ul><li>TDUP beat and raised top line outlook. Company reported $71M of revenue in 1Q, up 10.5% y/y, beating Street consensus of $67.5M and its guide of $67.5-$69.5M on the back of 95% y/y growth in new buyers, which was also the best quarter for new buyer acquisition in TDUP’s history.</li><li>On the call, management highlighted April has been the strongest month ever for new adds as the momentum has continued into 2Q.</li><li>Consequently, the company has raised its full year revenue guide to 8%-12% y/y growth from the prior 4%-8% y/y growth</li></ul>

TDUP beat and raised top line outlook. Company reported $71M of revenue in 1Q, up 10.5% y/y, beating Street consensus of $67.5M and its guide of $67.5-$69.5M on the back of 95% y/y growth in new buyers, which was also the best quarter for new buyer acquisition in TDUP’s history.On the call, management highlighted April has been the strongest month ever for new adds as the momentum has continued into 2Q.Consequently, the company has raised its full year revenue guide to 8%-12% y/y growth from the prior 4%-8% y/y growth

ThredUp, Inc. - Strong 1Q Momentum Continues... TDUP Ups Outlook

<ul><li>4Q results and 2025 outlook were already discussed, hence there were no surprises.</li><li>The key takeaways from the call and callbacks include the following.</li><li>Strong pickup in new buyers in 4Q, with momentum continuing into 1Q25.</li></ul>

4Q results and 2025 outlook were already discussed, hence there were no surprises.The key takeaways from the call and callbacks include the following.Strong pickup in new buyers in 4Q, with momentum continuing into 1Q25.

ThredUp, Inc. - Strong Momentum from 4Q Continues

<ul><li>Trading at a discount to REAL. ThredUp (TDUP) and The RealReal (REAL) are largely in the same business and have similar business models.</li><li>Based on FactSet consensus, TDUP is currently trading at less than 1x NTM revenue, while REAL is trading at ~2.5x. TDUP has very modest debt and its US business has been adjusted EBITDA profitable for the past five consecutive quarters, which gives it a leg up versus where REAL was a year ago.</li><li>Now, post the European divestiture, when management can devote both time and capital to the US business alone, the focus should be on top-line growth. </li></ul>

Trading at a discount to REAL. ThredUp (TDUP) and The RealReal (REAL) are largely in the same business and have similar business models.Based on FactSet consensus, TDUP is currently trading at less than 1x NTM revenue, while REAL is trading at ~2.5x. TDUP has very modest debt and its US business has been adjusted EBITDA profitable for the past five consecutive quarters, which gives it a leg up versus where REAL was a year ago.Now, post the European divestiture, when management can devote both time and capital to the US business alone, the focus should be on top-line growth. 

ThredUp, Inc. - Time to Look at ThredUp Once Again; Initiating Coverage

United States

ThredUp Inc. provides clothing exchange and recycling services. The Company offers an online store for customers to browse, exchange, and buy pre-owned clothes for infants and toddlers. ThredUp markets its products and services throughout the United States.

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ThredUp (TDUP US)

ThredUp, Inc. - Strong 1Q Momentum Continues... TDUP Ups Outlook

Company reported $71M of revenue in 1Q, up 10.5% y/y, beating Street consensus of $67.5M and its guide of $67.5-$69.5M on the back of 95% y/y...

Water Tower Research

ThredUp, Inc. - Strong Momentum from 4Q Continues

4Q results and 2025 outlook were already discussed, hence there were no surprises. The key takeaways from the call and callbacks include the...

Water Tower Research

ThredUp, Inc. - Time to Look at ThredUp Once Again; Initiating Coverage

Trading at a discount to REAL. ThredUp (TDUP) and The RealReal (REAL) are largely in the same business and have similar business models.

Water Tower Research

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