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Canaccord initiated a Buy rating and $45 price target on Zulily Inc (NASDAQ: ZU) in a report issued Friday.
Analysts led by Michael Graham believed that "zulily is early with its unique value proposition to the affluent but value-conscious mom. [The company] has turned shopping into a daily, serendipitous experience beginning promptly at 9:01 a.m., offering moms entertainment and shopping for non-mainstream fashion bargains."
Graham noted that vendors "get valuable exposure to their target customers with economics that are competitive with those from a conventional retailer" and that cohort analysis suggests "potential revenue upside."
Risks included customers regarding "zulily’s daily events as distracting; other flash-sale companies have faced difficulty scaling; zulily may not be able to source enough of the right products at the right times," according to Graham.
The $45 price target is "based on 40x our 2018 EPS estimate of $1.69, discounted to present at a rate of 10.4 percent."
Zulily Inc recently traded at $37.37, down 0.22 percent.
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