Market Overview

3 Reasons Roth Capital Likes Reebonz

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3 Reasons Roth Capital Likes Reebonz

Reebonz Holding Ltd (NASDAQ: RBZ) is a Singapore-based online platform that facilitates buying and selling of luxury products.

The Analyst

Roth Capital's Darren Aftahi initiated coverage of Reebonz with a Buy rating and 12-month price target of $11.

The Thesis

Reebonz operates a differentiated platform for new and pre-owned luxury goods within the Asia-Pacific market, Aftahi said in the initiation note. The company's $10.8 million capital raise in April puts it in a better position to aggressively spend on marketing and show topline growth in the back half of 2019. (See the analyst's track record here.)

Here are three reasons Aftahi likes the stock moving forward:

  1. Reebonz's total addressable market consists of the new and pre-owned luxury goods in APAC and estimated at $44 billion. The company's penetration rate stands at just 5 percent, which Aftahi said implies room for growth as the upper and middle-class gravitates more towards online channels.
  2. Compared to its peers, the analyst said Reebonz stands out by offering buyers a sell back guarantee and user credits. This gives repeat buyers an incentive to use its platform and the use of credits encourages buyers to become sellers. This creates a network effect and drives higher inventory as well as demand for products.
  3. The key to Reebonz's success, according to Aftahi, is its ability to boost variable marketing spend like customer acquisitions. Now that the "once capital constrained" company is flush with new capital, it can focus on generating member growth, buyer and order growth to generate a steady return on investments.

Price Action

Shares of Reebonz were trading higher by more than 6 percent at $5.70 Wednesday afternoon.

Related Links:

The Difference Between Finding Momentum And Chasing It

Reebonz Gives Up Huge Gains Following $20M Offering

Latest Ratings for RBZ

DateFirmActionFromTo
Sep 2019Roth CapitalMaintainsBuy
Jun 2019Maxim GroupInitiates Coverage OnBuy
Apr 2019Roth CapitalInitiates Coverage OnBuy

View More Analyst Ratings for RBZ
View the Latest Analyst Ratings

 

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Posted-In: Asia Pacific Darren Aftahi Luxury goods ROTH Capital PartnersAnalyst Color Price Target Initiation Analyst Ratings Best of Benzinga

Latest Ratings

StockFirmActionPT
WKHSRoth CapitalMaintains15.0
HCKTRoth CapitalMaintains22.0
ARECRoth CapitalInitiates Coverage On7.5
SLABWells FargoMaintains180.0
PENWells FargoMaintains310.0
View the Latest Analytics Ratings
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