Poshmark Drops on Weak Outlook and as Analysts Cut Price Targets

Poshmark plunges after forecasting lower-than-expected first-quarter sales, prompting analysts to lower their price targets on the stock.
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Poshmark  (POSH) - Get Report shares plunged on Friday after the online platform for selling high-end secondhand apparel forecast first-quarter revenue that missed estimates, prompting several analysts to lower their one-year price targets on the stock.

Redwood City, Calif.-based Poshmark posted its first quarterly results as a publicly listed company on Thursday. For the quarter ended Dec. 31, Poshmark’s loss narrowed to $4.06 million, or 31 cents a share, from a loss of $14.75 million, or $1.20 a share, a year earlier. 

After adjusting for one-time items, the company earned 5 cents a share during the quarter, above analysts' forecasts of adjusted earnings of 1 cent a share. 

However, Poshmark said it expects sales for the first quarter of 2021 to fall within a range of $75.5 million and $77.5 million, below the $79.2 million average expected by analysts polled by FactSet.

That spurred several analysts to lower their one-year price targets on the stock, even as they remained optimistic about possible reopening benefits that could drive more traffic to Poshmark’s designer online marketplace.

Barclays analyst Ross Sandler lowered his price target to $67 from $73, noting that first-quarter revenue guidance missed estimates due to bad weather in Texas “which is outside of the company’s control.” He has an equal weight rating on the stock.

Cowen analyst Oliver Chen lowered his price target to $70 from $88 on expectations that Poshmark’s revenue growth will likely be “tempered” in the first quarter, and that there could be “downside risk” in the second quarter due to uncertainty over the economic recovery. He has an outperform rating on the shares.

Morgan Stanley analyst Lauren Schenk, meantime, told her clients that Poshmark’s results were “not as clean as hoped,” though she also noted that management is seeing increased demand for “going out” items, which bodes well for a “potential reopening acceleration.”

She lowered her price target to $52 from $62 and held her equal-weight rating on the stock.

Poshmark filed to go public in December and opened its first day of trading on the Nasdaq on Jan. 14 at $97.50 a share. The stock has fallen since, hitting an all-time intraday low of $44.11 last Friday. The shares closed Thursday up nearly 16% at $59.46.

At last check, shares of Poshmark were down 19.9% at $47.63.