Poshmark (NASDAQ:POSH) has been caught in a fairly sizable downtrend over the past few weeks. A back-to-school clothing shopping boom was supposed to supercharge Poshmark’s growth, but Covid-19 concerns — not clothes — are currently at the top of everyone’s mind. Supposedly.
While these concerns are certainly valid, they aren’t presently aligned with what’s actually happening.
Our channel checks on Google Trends, SimilarWeb and AppAnnie reveal some insight into the present situation — search interest related to Poshmark is stable, web traffic to Poshmark.com is rising and downloads of Poshmark’s mobile app have trended higher in both June and July.
So, we see Covid-19 risks as future risks that have not yet materialized.
Is it possible that they materialize? Perhaps.
But we suspect that even in the event that they do, the negative impact they have on consumer behavior will be small and short-lived. And that people will still be shopping for clothes regardless of how the pandemic plays out.
Long Term Growth Is What Matters
For one, the company announced plans to bring India into the mix recently, meaning more people than ever will be buying clothing via Poshmark soon enough.
By the end of the quarter, individuals in India will be able to buy and sell clothes on Poshmark.com and from the app. Poshmark’s market will grow a lot due to this expansion, thanks to India’s internet-savvy population of 622 million.
And, if and when the pandemic impacts Poshmark, it will be temporary. It will last a few months at most.
The long-term growth narrative here remains untouched. And so long as that remains true, we remain bullish on POSH stock.
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On the date of publication, Luke Lango did not have (either directly or indirectly) any positions in the securities mentioned in this article.
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