Lulu’s Fashion Lounge
This small-cap retailer blew out earnings expectations recently and looks ready to run much higher. Lulu’s Fashion Lounge Holdings Inc. (NASDAQ: LVLU) is an online fashion retailer of women’s apparel targeting millennial and Gen Z customers. It specializes in occasion dresses but also offers broader categories, including formal, bridal, lounge, vacation and basics. Lulus sells products on its website in the United States.
Its fiscal fourth-quarter adjusted diluted loss was smaller than analysts polled by Capital IQ had expected and much smaller than the loss in the year-ago period. Revenue was up year over year and also topped consensus estimates. Its projected net revenue for fiscal 2022 is greater than the analysts’ forecast as well, so an outstanding quarter for the company.
Goldman Sachs has set a $15 target price, but the consensus target is higher at $17.29 The stock last traded on Thursday at $9.74. Hitting the Goldman Sachs target would be a 75% or so gain.
Rent the Runway
This may be an off-the-radar idea, but the upside potential is huge. Rent the Runway Inc. (NASDAQ: RENT) rents designer dresses, clothing and accessories for women through its stores and online platform. The company offers ready-to-wear, workwear, denim, casual, maternity, outerwear, blouses, knitwear, loungewear, activewear, ski wear, evening wear and kids wear products. It also offers jewelry, handbags and other accessories.
The stock has been absolutely mauled since it went public last October, and insiders have continued to buy shares during the freefall. The good news for investors considering shares now is the company has increased its subscribers substantially to 150,000 and has over 2.5 million lifetime customers.
The Goldman Sachs price target is $25. The $21.56 consensus target is also well above the final share price Thursday of $5.72. The Goldman Sachs target represents about a 330% gain.
These are five stocks for aggressive investors looking to get share count leverage on companies that have sizable upside potential. While not suited for all investors, they are not penny stocks with absolutely no track record or liquidity, and major Wall Street firms have research coverage.
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