The Redbubble Ltd (ASX: RBL) share price has continued its incredible run in 2021.
After recording a gain of 388% in 2020, the ecommerce company's shares are already up a further 20% this year to a record high of $6.63.
Image source: Getty Images
Why is the Redbubble share price on fire?
Investors have been fighting to get hold of the company's shares this week despite there being no news out of it.
However, with the UK in lockdown and the US still reporting sky high COVID-19 cases, trading conditions are looking very favourable for Redbubble right now.
In addition to this, I have written previously about a bullish broker note out of Goldman Sachs from last year.
Goldman Sachs has a buy rating and $6.25 price target on its shares. At the close on New Year's Eve, Redbubble's shares were trading below this at $5.52.
So why are its shares still going higher?
One interesting thing from that particular broker note was that Goldman Sachs suggested Redbubble's shares could be worth even more than its price target at the time.
This was if it could demonstrate consistency and potential revenue growth rates more in line with fellow ecommerce company Temple & Webster Group Ltd (ASX: TPW).
Goldman explained: "TPW has a materially more expensive rating reflecting, in our view, its more consistent execution track record as discussed earlier. If RBL were to achieve a revenue CAGR over our 10yr DCF horizon similar to that of TPW (which is 21% vs. 11% for RBL), our DCF value for RBL would increase from A$4.75 to A$10.75 (assuming no change to our EBITDA margin forecasts)."
"Given there is structurally no reason why we believe RBL's medium-to-long-term growth trajectory should be lower than TPW's, this would suggest there is arguably more option value in our target price for RBL relative to TPW, but we emphasise that consistency in execution remains key to close this hypothetical discount," it added.
It's possible that investors are becoming more confident that Redbubble will achieve this and the market will rerate its shares higher in the future.
