The Redbubble Ltd (ASX: RBL) share price has been an incredible performer in 2020.
Since the start of the year, the ecommerce company's shares have risen an incredible 410% from $1.10 to $5.62.
This has been driven by the accelerating shift to online shopping during the pandemic, which has underpinned Redbubble's explosive sales and profit growth.
Can the Redbubble share price go higher?
One leading broker that believes the Redbubble share price can go higher from here is Goldman Sachs.
According to a note out of the investment bank, following the release of its strong first quarter update, its analysts have retained their buy rating and lifted their price target to $6.25.
This price target implies potential upside of 11% for its shares over the next 12 months.
Why is Goldman bullish on Redbubble?
Goldman Sachs was impressed with its performance in the first quarter. Especially given how its growth is no longer being underpinned predominantly by face mask sales.
The broker commented: "Marketplace revenue was in line with GSe but strong gross margins were the positive surprise. RBL delivered 116% marketplace revenue growth in 1Q21 despite face mask revenue reducing as a percentage of total revenue through the quarter (27% in July to 14% in September)."
Its analysts believe this "implies a broadening contribution to growth across a range of categories, noting that Homewares, Artwork and Accessories all grew by >100% yoy in the quarter."
What else did Goldman Sachs say?
The broker notes that the broadening of its product range is a big positive, as it increases the company's total addressable market.
It also sees potential for greater repeat usage and operating leverage to boost its profitability.
Its analysts explained: "We remain Buy rated on RBL driven by: (1) expansion of its TAM through continued broadening of its product categories, (2) potential growth from increasing repeat usage on its platform (still relatively low at <1.5x p.a.), (3) further operating leverage as we expect RBL to manage cost growth well below revenue growth over our forecast period (we forecast opex to grow at a 7% CAGR FY20-FY23E vs. a marketplace revenue CAGR of 18% driving EBIT margins from 1.2% in FY20 to 11.3% in FY23E and an EBIT CAGR of 151%)."
