Ma large online consignment marketplace for luxury goods —The RealReal (REAL) – offers a product catalog of over 7,000 designers, including clothing, watches, jewelry, and art / home decor.
According to Needham analyst Anna Andreeva, the company may be the only luxury market to operate on such a large scale. This definitely gives RealReal the first-come-first advantage.
GMV growth, a positive point
In addition, the company is also seeing an acceleration in the gross value of goods (GMV), which is positive. Last year was tough, with GMV dropping 2% year-on-year. Nonetheless, 2021 treated RealReal better in terms of GMV. It is important to note that in November, the Black Friday sale recorded the highest GMV day ever traded. In addition, Andreeva sees other benefits for the GMV for the fourth quarter.
With the holidays approaching, the gift and hobby shopping season has also started, meaning that shoppers should visit the website often to browse and purchase products.
However, we’re here to discuss the details of the traffic to its website, which tells a different story.
Website traffic on a downward spiral
Interestingly, we discovered the website traffic tool from TipRanks, which derives a company’s website traffic volume from data coming from Semrush (SEMR) —That website traffic has been down so far this quarter (Q4).
Incidentally, the volume of unique visitors who visited RealReal’s website from all devices declined 68.41% in the fourth quarter from the start of the period. When we compared this quarterly period to the same period in 2020, we saw a significant drop of 18.97% this year.
Additionally, we have seen that there has been a 2.8% decrease in unique visits this year so far, compared to the same period last year.
Overall, website visits are showing a discouraging trend and this does not bode well for the company; especially since it is an e-commerce platform that thrives thanks to virtual tours of its online store.
Wall Street weighs
Andreeva is very bullish on RealReal’s outlook and recently reiterated a buy rating on the stock, with a price target of $ 35.
However, the decline in web traffic, especially just before Christmas, is a cause for concern. The Wall Street analyst consensus is bullish but cautious on the stock, with a moderate buy rating based on 6 buys and 3 takes. The average RealReal price target of $ 20.44 indicates upside potential of 57.2%.
Disclosure: At the time of publication, Chandrima Sanyal does not have a position in any of the titles mentioned in this article.
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