14 Worst 52-Week High Stocks to Buy According to Short Sellers

11. Revolve Group, Inc. (NYSE:RVLV)

52 Week Range: $12.25 – $25.95

Current Share Price: $25.17

Short % of Shares Outstanding: 13.27%

Number of Hedge Funds holding stakes as of Q2 2024: 17

Revolve Group, Inc. (NYSE:RVLV) is a consumer cyclical company that operates as an online fashion retailer for millennial and Generation Z consumers. It offers apparel, footwear, accessories, beauty, and home products from emerging, established, and owned brands.

After years of disappointing results, the online retailer stock has bounced back to life. The stock is trading near 52-week highs, waiting to see if it has what it takes to continue edging higher.

Revolve Group, Inc. (NYSE:RVLV) bounced back into growth in Q2 2024 after experiencing a five-quarter stretch of falling revenues, albeit with a relatively small increase. Revenues were up by 3% to $282.5 million, beating estimates of $277.2 million. The Revolve division saw a modest increase of 4% to $245.5 million, whereas its premium brand, forward, saw a slight drop of 4% to $36.9 million. International sales were a notable success, rising by 13% to $57.4 million.

The company maintained its strong gross profit margins at 54%, demonstrating the robustness of its business strategy, and managed to reduce its operational costs by decreasing its marketing budget. This led to a significant increase in operating profit, rising from $7.4 million to $16.4 million.

Revolve Group, Inc. (NYSE:RVLV)’s core business depends on the economy’s health. The Fed maintaining high interest rates threatens to hurt consumer purchasing power, which could affect the company’s ability to generate sales. Additionally, the company’s sales on the international scene could be under pressure due to a deteriorating global economy.

According to Insider Monkey’s Q2 data, 17 hedge funds were long Revolve Group, Inc. (NYSE:RVLV), compared to 13 funds in the prior quarter. Paul Marshall and Ian Wace’s Marshall Wace LLP is a prominent position holder in the company, with 478,623 shares worth $7.61 million.

Here is what Polen Capital specifically said about Revolve Group, Inc. (NYSE:RVLV) in its Q2 2024 investor letter:

“Revolve Group, Inc. (NYSE:RVLV) is an online fashion retailer targeting Gen Z women. The stock was one of our top performers early in the year but has retrenched over the past quarter largely due to increasing “risk-off” flight-to-safety market dynamics. Notably, the business fundamentals have inflected positively this year, leading us to believe that shifting market sentiment has an outsized impact on the stock price. Revolve Group is more economically sensitive over the near term as a consumer discretionary company, but earnings have bottomed after two tough years, and we continue to view Revolve as well-positioned to grow earnings at an accelerating rate over the near term, while the long-term outlook is intact.”