Zulily’s stock jumped 10 percent this morning after an analyst report upgraded the company’s shares to a buy from a neutral rating.
In early trading, shares were up $3.70 apiece to trade at $40.25. Investors were bullish on the online retailer, which markets clothing, toys and home goods to moms, after Goldman Sachs released a report that said Zulily’s “hyper growth warrants attention.”
The analyst was also impressed that the deals site is set to surpass $1 billion in sales this year in only its fifth year of operation.
“If achieved, (Zulily) will join the company of Amazon and Old Navy as the fastest retailers to reach this key milestone,” the report said, according to Investor’s Business Daily.
Zulily’s stock has been on a wild ride since going public less than a year ago. The Seattle company went public at $22 a share and peaked at $73.50 a share in February, but has since corrected after the company announced it was stressing growth before profits.
That approach is now being viewed as a positive apparently.
“We view (Zulily’s) aggressive pricing strategy as core to continued share gains in both kids and non-kids categories,” Goldman said in the report.
With today’s spike, Zulily is now worth roughly $5 billion, which makes it more valuable than the Carters clothing brand, which has a market capitalization of $3.73 billion.