The booming resale fashion market has a clear leader in ThredUp, Barclays said Tuesday. The firm initiated coverage of the stock with an overweight rating, comparing the company's business model and market-position to the early days of Amazon. "TDUP is a leading mass-market player in the rapidly growing apparel and accessories resale e-commerce space," the note said. "Its business model built around proprietary logistics infrastructure and razor-thin contribution profit per item reminds us of Amazon in the early days, when heavy upfront investments assured high customer service levels and retention." ThredUp's position as a leader in sustainable fashion makes it a smart long-term and near-term play, Barclays said. "The company is a direct play on the societal shift towards sustainable fashion; estimates show the resale TAM increasing 5x from 2019 to 2024, outpacing traditional apparel e-commerce. TDUP is also a nice re-opening play and should see accelerating growth in 2021," Barclays said in a note. The firm set a price target of $19 per share for ThredUp, which is 24.5% above where the stock closed on Monday. The company had a big IPO last month, where the shares jumped more than 40% on the first day of trading. The stock rose as high as $31.60 in subsequent trading days before pulling back in April. Barclays was not the only investment firm to initiate coverage of ThredUp with positive coverage on Tuesday. Goldman Sachs, KeyBanc and Telsey Advisory Group also assumed coverage with a buy or buy-equivalent rating. -CNBC's Michael Bloom contributed to this story.
