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the red-hot IPO just keep coming I thought they might peter out after the uber fiasco but we keep getting new deals and some of them are even good just last week we got an incredible one I shoulda known this cuz my youngest told me that it's called revolve group RV LV which is an online fashion play that is shaking up the entire retail industry bumpkin bubbly at 18 dollars a share then open at 25 and finished his first day of trading at 34 that's almost double in the last 24 hours whoo in less than 20 bars I gotta tell you something I see that just keep going on tell me a big institutional buy and it just keeps roaring today revolve tacked on another buck three percent hundred thirty six dollars and change well before we write this move office yet another sign of a somewhat frothy market it's worth getting our heads around what revolve actually does because maybe there's something real here don't forget beyond meat really works you know it just shot out of the gate but that was because it was a fabulous story and the deal was very under price I was gun shy on that one I told you to ring the register way too soon and now well it's just too late I don't want to make the same mistake with revolve so let's play know your IPO the real interesting thing about revolve group is that it's making a killing in an environment where most retailers are getting killed other than Walmart Costco target throwing TV accent wasn't that great equipment ejects the group is having a very hard time especially department stores that are in high fashion businesses tetravaal sells the same stuff they do and they're absolutely crushing the department stores in fact you might say they become the retailer choice for males who could afford it alright how does revolve work well it's an online store absolutely three stores the high-end revolve the even higher and forward and the lower price point the super dope super down now the company was founded in 2003 with the idea that traditional retail was either to mass or to neish they wanted to create a digital platform that would be targeted than mourned it worked harder than the department source but with a broader selection in specialty stores then revolved built our own technology platform with automated inventory management pricing and even trend forecasting algorithms they take data from millions of customer interactions and use it to predict how fashions are going to change that enables revolve to pick the right merchandise don't you wonder if they use the tableau right I mean this is what you're talking about taking that data and making some nice charts about it tell us what to do the fashion business has always been more of an art than science right but Rabab is trying to change that yes they launched a thousand new styles every single week in small volumes and then they double down on whatever works I think this is a brilliant idea and we know it's working how do we know that if you're a department store inventory management is the bane of your existence when you bet on the wrong horse nice and it doesn't sell you end up marking it down until the customers are willing to take you'll off your hands that's right roughly last year 79 percent revolves sales were at full price that means no promotion that's pretty amazing that's something 75 which is also good in 2017 yes they're doing very little discounting it revolved because they know what their customers want and they're not just selling other people's clothing revolve as 21 company owned brands these are private label bears but the company market some is independent because that gets more traction with consumers in the past year revolves brands made up eight of the top ten best sellers County for nearly a third of the company's total sales obviously it's more profitable to sell your own merchandise than to sell someone else's and this isn't guys this is not cheap stuff the average order was Twitter $79 so bad but that's how we resolved could have a gross margin that they that's that money that they make after the cost of goods sold a 51% which is spectacular for retailer you think they were in the jewelry business for heaven's sake not the apparel business at the same time these guys are accepted using social media selling Millennials yeah they've got 2,000 they got thousands of influencers you know people who say good things and brand partners helping them move merchandise that's how the company gets 56 percent of its traffic from free or low-cost sources revolves now getting nine point eight million unique visitors per month but magic believes the company still has an enormous amount of room to be able to grow they've only got three percent market share in their demographic right now that is ridiculous this has got so much runway I really like this story but how about let's deal with the numbers per second in the first quarter revolve had 21.2% revenue growth driven by nearly 40% increase in the number of active customers not shabby total orders from 39% cash flow from operations grew by 31% and the company's profitable you heard me profitable in fact they've been consistently turning a profit for years now this is not your typical red-hot IPO it's all about revenue growth with no concern for earnings revolves pristine balance sheet I love it the only negative is that their margins took a little hit in the first quarter but that's because they rolled out their new lower price concept super super damn when you look at those numbers it's easy to see why the stock exploited higher right out of the gray you know even Andrew left that noted short seller says Trump he he he was then he's notoriously skeptical but not about this he actually came out with a positive peace on revolve hey that's good endorsement when a negative guy does it so where do I come out in this one as a company I think revolve group is fantastic lots of startups like to tell you that they've discovered the business model of the future but in this case there's strong evidence of revolvers figured out the right formula for an online department store we know it'll work because it's already working the numbers are that good plus I think that the timing of this deal couldn't be better this IPO cycle what we've seen company after company got public too late in the lifespan that was the problem with lyft and with uber their growth had already peaked years ago oh well in the case of Newberry see last year but you know you and you'll come back public with rabid revenue growth but no profits and then there's a painful period where your growth slows and your property doesn't pick up enough to offset the revenues softness however revolve has already made it through that awkward phase and the company is still young enough to keep delivering excellent numbers in short revolve the company has a lot going for it but revolve the stock all right that's more of an open question at these levels - daran theme sells for 90 times last year's earnings estimates about 5.5 times sales little betters but it's expensive of course investors don't seem to care about valuation when it comes to red-hot IPOs right now but it's still worth keeping in mind granted the company more than quintuple as earnings last year it still might not end up looking much more cheaper in retrospect that said I just can't bring myself to recommend a stock that's a little more than doubled in the past week feels too much to me like chasing I like Revlon I like revolve but I think you need to wait for a better entry point if you want to buy it here's the bottom line in a world where department stores keep losing vast amounts of business you got to wonder whether where that business is going at least in some of its cases it's going to end up at revolve group which is why I think you should put this stock on your shopping list and wait for a pullback which I think we can get its get gets the low 30s you know what just go buy some and that never happens well you know what you got to say you missed it Marvin in New York Marvin how you doing mr.
crema so I'm good Marvin how are you the question I have is your Macy's your Macy has 19 billion to 21 billion dollars worth of real estate that there one piece of property in Manhattan alone is worth a billion Macy's market cap is six billion eight hundred million so that one piece of property could buy Walter stock the net income on Macy's at 1 billion 100 million the EPS or any per share is 358 right what a p/e the stock should be 70 on it I'm sorry from the hedge fund Carl Icahn somebody who come in there and and buy a lot of stock and forced a hand well I mean you know starboard did a good analysis was okay analysis of the real estate and they got nowhere near those numbers I think those numbers are wild high also the growth is really suspect that's why it sells throughout seven times I'm not buying into this one I am very sorry I like the company very much but not as a real estate play more as a get paid the wait reports it catches on fire and Jeff Jeff connect gets the job right alright some retail businesses any up to revolve group wait for a pullback though before you pull the trigger much more made money in roughly fifty million residential properties and ten trillion in a mast debt the American mortgage market is the largest source of consumer lending on earth tonight I'm talking to the number one retail mortgage lender find out what's happening don't miss my exclusive with Quicken Loans then I'm telling you why eli lilly and johnson johnson are emblematic of your role market in the way your calls rapid-fire nice except bunnne cnbc.com Booya jim cramer here from mad
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