My positive case for Redbubble $RBL

All time low, room to grow?

I’m not going to explain what Redbubble is here, the business is pretty straightforward.

Recently at a 2nd time high at $1.00, it now sits near its all time low at $0.69 but I think it is undervalued.

My personal use with Redbubble…

I try to keep my biases out of these, especially with Redbubble because I’ve been using their business since 2012. Buying custom designed t-shirts mainly because of the designs and heck, the re-occurring 20% discounts. Overall I can’t fault the business for anything with my personal use, free stickers and the new updated re-usable bag? F*ck yea!

The price…

The price has been on a downward trend since its debut in 2016. I currently don’t touch IPO’s and newly publicly listed business. I usually wait until 2 annual reports are released before entering hence I ignored $RBL until now.

With my analysis I find it to be undervalued at its current price with an intrinsic value of ~$1.20 and this is with a minor positive net income in FY2019.

Google Trend comparison between some “custom design” businesses

The negatives and positives…

  • They’re currently losing money but they’re expecting positive EBITDA late FY2018.
  • They have decent cash with little debt.
  • They have no real moat but whats special with Redbubble is its community of creatives.
  • Socially forward, not bland and boring.
  • Quality control.
  • They can increase their margins with creatives and squeeze more profit.
  • I believe a lot of people don’t like $RBL due to its lack of a moat, anyone can create this sort of business. But $RBL focusing on their high quality artists and designs is key.

Put my money where my mouth is…

Bought a small order to dip my feet at $0.65/share.

See you again soon to see what comes of this.