“Things are pumping on all cylinders, and we’re a V12; we’ve got a lot of cylinders.” Michael Mente, co-founder, and co-CEO of Revolve.

RVLV is undervalued. It is easily a 100 stock. I see its stock price having a similar trajectory to Lululemon. The stock is misunderstood by Wall Street. Most analysts do not even know what Revolve sells or how they advertise. They are not just a fashion company, they are a cultural brand, which is not priced into the stock price. They have true staying-power which will allow them to maintain their stellar growth rate.

RVLV utilizes social media influence marketing/data analytics to find the next fashion trends and get trending products to their target audience – Mainly millennials and Gen Z females.

Just to compare how frequently they engage on social media compared with other fashion companies: 

Instagram:

Revolve: 17,422 posts, 5 m followers
Nordstrom: 6,608 posts, 3.4 m followers
Louis Vuitton: 5,870 posts, 47.3 m followers
Aritzia: 3,745 posts, 1.2 m followers
Lululemon: 3,254 posts, 3.9 m followers

TikTok:

Revolve: 309.7k followers, 2.9 m likes
Nordstrom: 22.3k followers, 1.7 m likes
Louis Vuitton: 1.4 m followers, 10 m likes
Aritzia: 28.7k followers, 28.8k likes
Lululemon: 256.2k followers, 2.6 m likes

Thesis: Why I am so bullish on Revolve

Proprietary Technology Infrastructure: Think of Revolve Group as the Amazon for Fashion. They utilize their proprietary technology, data science, influencer marketing, and brand ambassador program to become a lux fashion networking giant. The strategies they use are absolutely brilliant. For example, the majority of Revolve’s influencers and ambassadors do not get paid in cash, they receive store credit. Buy more clothes, sells more clothes! The most important thing with Revolve is no other American fashion company is engaging with their audience like this. They operate more like a European fashion company than an American fashion company. My ultra-bull case thesis is that Revolve becomes the Louis Vuitton of America.

Kendall Jenner Factor: In September 2021, Kendall Jenner was named the creative director for Forward, Revolve’s higher-end faster-growing luxury-focused division. FWRD sales were up 83% year-over-year in the subsequent three months. Jenner is a cash cow who makes about $611,000 (probably more) per Instagram post. From their latest Q4 earnings call, there are “special FWRD activations in the works,” for Kendall later this year.

Revolve Festival Returns in April: Revolve Festival is the “it” party in Coachella. After a two-year hiatus because of the pandemic, the invite-only party returns, which will increase greater brand awareness. They already have the cool factor. In September they had their first-ever New York Fashion Week runway show. “According to Tribe Dynamics, from September 6-11, the hashtag #revolvegallery generated $7.9 million in EMV (earned media value).” Just recently they hosted during Super Bowl weekend a two-day “Homecoming Weekend” event at the Pacific Design Center. The event was headlined by Justin Bieber and Drake. The guest list included the likes of Leonardo DiCaprio, Jeff Bezos, and Russell Wilson. You cannot get better than having a ton of A-list celebrities promoting your brand.

Oana Ruxandra: Revolve’s new board member is the Chief Digital Officer & Exec VP of Business Development for Warner Music Group. This is a tremendous asset to Revolve as she has a lot of connections with TikTok and Snapchat. Given her background, this could signal that Revolve will get into NFTs and/or metaverse. This gives Revolve another arsenal to better engage with their audience.

This isn’t a stay-at-home play. This isn’t a cash-burning speculative company. They are a legitimate cash-flowing business that utilizes innovative marketing techniques that other luxury apparel companies have yet to catch onto yet. There are tons of catalysts events for Revolve this year and next. I did not even mention they are opening their first store in March! “A lounge, cafe, bar, Instagram-bait photo walls… and a gym and wellness center.”

In order for retail to thrive in the future, they will need to drastically communicate with their consumers in a different way. This will require more experience-based retail and doubling down on technology. This is the Revolve business. Their core customers are not just buying clothes, they are getting a curated experience of an affluent lifestyle. The influencers are living that lifestyle, which creates a culturally significant brand.

Revolve is well-positioned in the luxury market for the long-term with several growth catalysts ahead. Our society is moving rapidly from offline to online and this shift is not a fad, it is a secular change. 22% of all luxury shopping is online in 2021. That number will reach 30% before 2030. Patient investors will be rewarded in the long run.

When I bought the stock two years ago, I viewed it as a good re-opening play. I didn’t imagine the success they would have during the pandemic. With live events returning, I expect the stock to soar. I am not selling, not for a while. Wall Street is sleeping on this company.

All these views are mine and do not represent financial advice, do your own research. I am not a financial advisor. This is for entertainment purposes only.