Cowen analysts conducted a survey of customers in the U.S. and Germany who shop on luxury e-commerce site MyTheresa, finding that about 45% typically spend more than $30,000, or €30,000, annually.
The study also found that the site has high customer loyalty, with about 90% saying they are likely to recommend MyTheresa to others.
MyTheresa is one of a number of e-commerce retailers that has gone public recently, with shares making their debut in January. The parent company for Mytheresa Group GmbH is MYT Netherlands Parent BV
“We like MyTheresa’s consistent execution reflected in steady active customers, revenue, and profitability growth from FY18 to present, as well as 100% brand retention that is key to supply,” analysts led by Oliver Chen wrote.
Analysts note that MyTheresa is a $600 million platform with the potential for more than 20% long-term revenue growth.
“In addition to consistency, MyTheresa is positioned as a key beneficiary of global luxury going online; Cowen estimates the global online luxury market will grow +25% CAGR [compound annual growth rate].”
Cowen initiated MyTheresa stock outperform with a $40 price target.
JPMorgan analysts say MyTheresa has an “opportunity to own early inning e-commerce growth within the underpenetrated luxury online retail sector.”
Within the online luxury retail category, analysts say MyTheresa has less than 20% overlap with its competitors. Other companies in this sector include Farfetch Ltd.
and Nordstrom Inc.
which sells online in addition to its traditional department store locations.
“MyTheresa has a unique and differentiated positioning within the online multi-brand luxury sector, driven by its highly curated product offering and disciplined focus on the high-end segment of luxury,” JPMorgan wrote.
“On the product side, MyTheresa facilitates an efficient purchase process for its time-constrained consumers, with a focus on quality over quantity, making it easier for consumers to find the best product in a short space of time.”
JPMorgan initiated MyTheresa stock at overweight with a $38 price target.
UBS, which initiated MyTheresa at neutral, highlights the risks of the stock.
“Risk factors include luxury industry competition, a concentrated supply base, a concentrated customer/shopper base and complexities from an international presence,” the note said.
Still, UBS is “constructive” on the opportunity for the retailer as luxury heads online.
MyTheresa stock rose 6.2% in Tuesday trading. Shares began trading at $35.85 and closed Friday at $31.34.