NEW YORK (TheStreet) -- Zulily (ZU), an online retailer that targets mothers, has had a tough time convincing analysts of its potential, but a new note from Oppenheimer suggests that the retailer may finally be gaining support from Wall Street.
Zulily shares tumbled 22% on Feb. 11 right after it reported slow growth in the fourth quarter of 2014 and provided weak guidance for the first quarter of 2015. It has had trouble maintaining revenue growth, and has seen high churn rates, likely due -- at least in part -- to slow delivery times.
In the fourth quarter of 2014, it took an average of 13.7 days for an order to leave Zulily's warehouses, up from 11.5 days in 2013. That's not including shipping time from the warehouse to the consumer, which would bring delivery times to more than two weeks.
The retailer recently announced that it would start to hold some inventory in its warehouses to speed up delivery time. It has also been working with Facebook (FB - Get Report) to be one of the first retailers to leverage Facebook Messenger as a communications platform with consumers
These efforts are giving analysts some hope.
"With a near-term focus on reducing shipping times and improving the consistency of inventory availability though new fulfillment centers, we believe ZU is well-positioned to benefit from the secular shift to online and mobile commerce," Oppenheimer analysts wrote.
Oppenheimer today initiated coverage of Zulily with an Outperform rating and $17 price target. Shares are trading around $13.40 today.
The analysts also noted that Zulily would need to "maintain a 1% market share, in order to realize upside in the shares." According to comScore, Zulily attracted 14 million unique visitors in February, beating Nordstrom's (JWN - Get Report) 11 million and Bed, Bath & Beyond's (BBBY - Get Report) 8 million. It still trails Amazon's (AMZN - Get Report) 140 million unique visitors, Wal-Mart's (WMT - Get Report) 61 million, and Target's (TGT - Get Report) 37 million.