Want to Know Why Poshmark, Inc. (POSH) Stock is Plunging in Aftermarket, Here’s Your Answer

Poshmark, Inc. (POSH), a company that operates as a social marketplace for new and secondhand style products, has dipped 26.4% in aftermarket trading session and consequently is trading at $18.05 at the time of the writing. The decline is attributable to the announcement of quarterly results by the company. On Tuesday, POSH closed the day at $24.53 after increasing 6.19% during regular trading hours.

Why POSH Dipping?

In the late hours of Tuesday, POSH reported the financial results for the third quarter of the fiscal year 2021. The quarter ended on 30th September 2021. The company generated total net revenue of $68.78 million during the quarter against $79.65 million for the same period of 2020. The total costs and expenses bore by the company during the period was $57.12 million against $86.88 million for the same period of2020. The company generated a net income of $10.77 million (or net income of $0.65 and $0.44 per basic and diluted share) during the quarter against the net loss of $7.19 million (or net loss of $0.09 per basic and diluted share) for the same period of 2020. The company had cash and cash equivalents of $235.83 million at the end of the quarter.

Business Highlights and Financial Outlook

Alongside the financial results, the company also reported business highlights of the period. At the end of July, the company expanded its partnership with Affirm to broaden its Split Pay Products. Also, in September, the company set foot in India, which was its third international market. The company acquired Suede One in October, while at the end of October; the company launched its Brand Closets Program. The program enabled the large scale brands to open a closet on Poshmark. For the financial outlook, the company estimated that the expected revenue range for the fourth quarter of 2021 would be $80 million to $82 million while the adjusted EBITDA range would be $7 million to $8 million.

Executive Commentary

Manish Chandra, Founder and Chief Executive Officer of POSH, while commenting on the results said that the company has delivered some strong financial results during the quarter. He highlighted that the company has a long runway of growth ahead, driven by strategic investments in product innovation, opening its platform to larger brands with Brand Closets, and expanding authentication services to cement its marketplace as the trusted choice for buyers.

What’s Ahead for POSH Stock?

Over the previous three months, the POSH stock has generally shown a stable trend, neither skyrocketing nor plummeting. Analysts however suggest that the coming quarters are pivotal for the success of the company, as they would decide whether the policy measures adopted by the c=management would pay dividends or not.