Michael Karanikolas, Co-Chief Executive Officer of Revolve Group , Inc. (NYSE:RVLV), recently executed a series of stock transactions resulting in the sale of approximately $7.78 million worth of Class A common stock. According to a recent SEC filing, Karanikolas sold shares over several days in early November.
On November 4, Karanikolas sold 20,373 shares at an average price of $25.95. The following day, he sold an additional 37,103 shares at an average price of $25.92. On November 6, Karanikolas continued his selling activity with multiple transactions, including 19,938 shares at $29.69, 55,394 shares at $30.79, 78,122 shares at $31.81, and finally, 46,546 shares at $32.32.
These transactions were part of a Rule 10b5-1 trading plan adopted by MMMK Development, Inc., a company in which Karanikolas shares voting and dispositive power. Following these sales, Karanikolas holds no shares directly but maintains indirect ownership through MMMK Development, Inc.
In other recent news, Revolve Group Inc. reported impressive growth in its third-quarter earnings for 2024. The company's net sales hit $283 million, marking a 10% increase from the previous year, while net income significantly rose to $11 million. Adjusted EBITDA also saw an 85% growth, reaching $18 million. The company's co-CEOs, Mike Karanikolas and Michael Mente, attribute this robust growth to improved logistics, lower return rates, and strong performance in key categories.
Revolve also emphasized its strategic investments in AI technology and international expansion as key contributors to its positive outlook. The company reported a 20% growth in international sales, particularly in the Chinese market. Furthermore, Revolve plans to open a holiday shop and a flagship store by mid-2025.
Despite higher than desired inventory levels, alignment with sales growth is expected by Q4. Analysts have expressed a bullish outlook on Revolve's future, citing significant growth in the Chinese market and active investment in AI as major long-term opportunities. However, they also anticipate a slight decline in Q4 gross margin due to markdowns and freight costs.
InvestingPro Insights
The recent stock sales by Michael Karanikolas, Co-CEO of Revolve Group, Inc. (NYSE:RVLV), come at a time when the company's stock is showing significant momentum. According to InvestingPro data, RVLV has seen a remarkable 139.08% price total return over the past year, with a 41.98% return in just the last month. This strong performance is reflected in the stock trading near its 52-week high, at 98.4% of that peak.
InvestingPro Tips highlight that RVLV holds more cash than debt on its balance sheet, indicating a solid financial position. This could be reassuring for investors in light of the insider selling activity. Additionally, the company's liquid assets exceed short-term obligations, suggesting good short-term financial health.
However, it's worth noting that RVLV is trading at a high P/E ratio of 71.5, which is significantly above the market average. This high valuation is further emphasized by the company's PEG ratio of 1.82, indicating that the stock may be trading at a premium relative to its earnings growth.
For investors seeking a more comprehensive analysis, InvestingPro offers 16 additional tips for RVLV, providing a deeper understanding of the company's financial health and market position. These insights could be particularly valuable in interpreting the significance of the insider selling activity in the context of the company's overall performance and valuation.
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