The Cettire Ltd (ASX: CTT) share price has been on a tear since reporting its FY24 earnings last month.
Shares in the online luxury goods retailer have surged 27% in the past week to sit at $1.68 per share at the time of writing.
The market seems to be rewarding the company's growth prospects despite some underlying concerns.
Let's break down what's been driving the Cettire share price rally post-earnings.
Mixed FY24 numbers
At the heart of the recent share price surge is Cettire's revenue growth in FY24.
The company reported an 81% year on year increase in gross revenue, climbing to $978 million, with sales revenue growing by 78%.
Growth was underscored by a 64% increase in active customers, now totalling over 692,000.
While the revenue numbers were strong, Cettire's profitability took a hit. The company reported a 34% decline in net profit after its pre-tax margins compressed to around 4.5%.
This margin decrease was largely attributed to rising customer acquisition costs, which increased to 9.5% of sales.
Interestingly, Cettire sold off sharply in the immediate days following its FY24 results. As my colleague James reported, the stock underwent a 20% sell-down.
This placed the Cettire share price as one of the most heavily shorted stocks at the end of August.
Cettire shares rally
Despite the mixed numbers, investors bid up Cettire shares in September. This has completely erased all losses incurred after the company's annual results.
One catalyst for the Cettire share price might have been CEO Dean Mintz's purchase of around $16 million of stock last week.
This equates to 11.4 million shares, bringing his ownership to around a third of the company.
Aside from that, investors might be focusing on Cettire's growth outlook, which is outlined in its earnings release.
Management expects sales revenue growth of around 20% for the first quarter of FY25. Meanwhile, analysts are optimistic too.
Bell Potter has maintained a speculative buy rating on the Cettire share price, citing the company's lean business model and growth prospects.
The broker "continue[s] to see plenty of upside in revenue/earnings" from Q3 next year. It set a price target of $2.00, implying a potential upside of 19% from current levels.
Consensus also rates the stock a buy, according to CommSec.
Foolish takeaway
The Cettire share price has lifted more than 25% in the past five days.
Over the past twelve months, it has slipped 40% into the red.
