The Redbubble Ltd (ASX: RBL) share price was a very strong performer on Wednesday.
The ecommerce company’s shares jumped 12% in afternoon trade to finish the day at a record high of $6.11.
This means the Redbubble share price is now up 460% since the start of the year.
Why did the Redbubble share price storm to a record high?
Investors appear to have been buying the company’s shares for a couple of reasons.
The first is a series of positive updates from fellow ecommerce companies such as Kogan.com Ltd (ASX: KGN) and Mydeal.ComAu Pty Ltd (ASX: MYD) that demonstrate that the online shopping boom has continued.
This was particularly the case during the Black Friday and Cyber Monday promotional period, where a number of buy now pay later providers and retailers both reported stellar growth.
Another catalyst was a broker note out of Goldman Sachs last month.
Its analysts reiterated their buy rating and $6.25 price target on the company’s shares in response to Redbubble announcing the appointment of its new chief executive officer, former SEEK Limited (ASX: SEK) executive, Michael Ilczynki.
Goldman seemed to be pleased with the appointment and continues to believe that Redbubble is well-positioned for growth.
Why is Redbubble positioned for growth?
The broker named three reasons why it thinks Redbubble is well-placed for growth and was good value at the time.
“(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.
Whether the Redbubble share price can go higher in the near term, only time will tell. But it is worth noting that its shares are now trading within a whisker of this price target.