The Redbubble Ltd (ASX: RBL) share price has continued its remarkable run on Monday.
The ecommerce company’s shares jumped a further 9.5% to reach a record high of $2.30.
When the Redbubble share price reached that level, it meant they were up an astonishing 475% from their March low.
Why is the Redbubble share price at a record high?
Investors have been fighting to get hold of Redbubble’s shares over the last few months after it followed the lead of Kogan.com Ltd (ASX: KGN) and Temple & Webster Group Ltd (ASX: TPW) by reporting exceptionally strong sales growth during the pandemic.
For example, last month the company released an update which revealed that fourth quarter to date, marketplace revenue was up 107% over the prior corresponding period.
This meant that year to date, marketplace revenue was up 42% on the prior corresponding period. This compares to growth of 26% for the first half and 25% for the third quarter.
Another positive was that its operating expenses had only lifted 7.7% during April and May, in comparison to the first two months of the third quarter.
As a result, its operating earnings before interest, tax, depreciation and amortisation (EBITDA) for the period 1 July 2019 to 31 May 2020 was $11.9 million. This compares to the operating EBITDA of $3.8 million it achieved in FY 2019.
What is driving this growth?
This strong growth has been driven by the acceleration in online activity throughout the fourth quarter of FY 2020 because of the pandemic.
Management notes that it has experienced an increase in demand at both of its marketplaces, Redbubble and TeePublic, as well as across core geographies and product categories.
Pleasingly, despite the rapid increase in sales, its supply chain has managed to cope and customer orders have been fulfilled within expectations.
Is it too late to invest?
While I have no doubts that Redbubble will continue to benefit from the shift to online shopping, I think its shares are fully valued now.
In light of this, I wouldn’t be in a rush to invest just yet and would suggest investors wait for a better entry point in the future.
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James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of Kogan.com ltd and Temple & Webster Group Ltd. The Motley Fool Australia has recommended Kogan.com ltd, REDBUBBLE FPO, and Temple & Webster Group Ltd. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.
The post The Redbubble share price is up almost 500% from its low: Is it too late to invest? appeared first on Motley Fool Australia.
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