The Redbubble Ltd (ASX: RBL) share price was a strong performer on Tuesday.
The ecommerce company’s shares ended the day 4% higher at $5.19.
This latest gain means the Redbubble share price is now up an impressive 31% over the last couple of weeks.
Can the Redbubble share price still go higher from here?
One leading broker that believes the Redbubble share price can still go even higher from here is Goldman Sachs.
At the end of last week, the broker reiterated its buy rating and $6.25 price target on the company’s shares.
Based on today’s share price, this price target implies potential upside of 20% over the next 12 months.
What did Goldman Sachs say about Redbubble?
Goldman reiterated its buy rating in response to Redbubble announcing the appointment of its new chief executive officer. You can read more detail on this appointment here.
The company has named former SEEK Limited (ASX: SEK) executive, Michael Ilczynki, as its new CEO, effective 27 January.
The broker notes that Mr Ilczynki was with the job listings giant for 13 years, where he has worked in strategy, product & technology, and commercial operations, culminating as CEO of its Asia Pacific & Americas businesses.
The broker appears pleased with this appointment and continues to believe that Redbubble is well-positioned for growth. It named three reasons why it thinks the company’s shares are in the buy zone:
“(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 FY20E-FY23E vs. a marketplace revenue CAGR of 18% driving EBIT margins from 1.2% in FY20E to 11.3% in FY23E and an EBIT CAGR of 151%),” Goldman concluded.
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