Shares of the fashion retailer have fallen almost in price 60% year-to-date
Revolve Group Inc (NYSE:RVLV) is on the rise today, following news that sector peer Poshmark (POSH) is being acquired by Naver for $1.2 billion. The stock was last seen up 5.6% at $23.73 in an attempt to chip away at its 58.3% year-to-date deficit. The stock last Friday touched an annual low of $21.68 with pressure at the 40-day moving average guiding the shares lower for the better part of September.
RVLV's dismal price action has attracted bearish short-term options traders, who have been incredibly put-biased of late. This is per the equity's Schaeffer's put/call open interest ratio (SOIR) of 3.55, which sits in the 96th percentile of its annual range.
Echoing this, Revolve stock sports a 10-day put/call volume ratio of 6.60 at the International Securities Exchange (ISE), Cboe Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX), which stands higher than 100% of readings from the past 12 months. In other words, puts are being picked up at their quickest clip in a year.
Nonetheless, Revolve stock provides an intriguing valuation for growth investors at a forward price-earnings ratio of 20.45 and a price-sales ratio of 1.53. Although the retail business is expected to end fiscal 2022 with a significant 46.3% decrease in earnings, it is on track to continue its impressive top-line growth rate. RVLV has already managed to increase its annual revenues 112% since fiscal 2018 and estimates project another 20.7% revenue increase for fiscal 2022. In addition, Revolve is expected to report an 11.7% increase in revenues and a 30.6% increase in earnings for fiscal 2023.
Furthermore, the retailer holds an exceptional balance sheet with only $16.48 million in total debt and $237.86 million in cash, placing it in an ideal position to continue expanding. In general, Revolve stock offers a relatively safe option for investors looking for higher growth opportunities due to the company’s strong balance sheet and sustained profitability.