UPDATE: CRT Research Upgrades Zulily As Pullback Presents Opportunity

In a report published Tuesday, CRT Research analyst Neil Doshi upgraded the rating on

from Fair Value to Buy, and reiterated a $41.00 price target. In the report, CRT Research noted, “ZU shares closed last Friday at $32.80, representing a 16% sell-off since 2Q earnings on August 6 (vs. the NASDAQ up ~5% over the same timeframe). While ZU reported a mixed 2Q, beating consensus forecasts for the quarter but guiding 3Q EBITDA below the Street, we view the extended negative reaction to 2Q as overdone, and believe that risk-reward is now in positive territory with the stock now trading at 34x/20x 2015E/2016E EV/EBITDA, versus our expectation for revenue and EBITDA to grow at CAGRs of 52% and 95%, respectively, from 2013 to 2016. Further, we note that ZU's upcoming analyst day on September 11 at its Ohio fulfillment center could act as a catalyst for the shares. We are upgrading ZU shares to Buy and maintain our $41 price target, based on 28x 2016E EV/EBITDA.” Zulily closed on Friday at $32.80.