ThredUp (ThredUp) Predictability Rank

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What is ThredUp Predictability Rank?

Not Rated

Warren Buffett said many times that the companies he likes are:

1. Simple businesses that he understands
2. that have predictable and proven earnings and
3. with economic moat
4. those can be bought at a reasonable price.

It is hard to quantify "simple businesses that he (Buffett) understands", so we will focus on the other three characteristics instead. In GuruFocus Research: What worked in the market from 1998-2008? Part I: Introduction of Predictability Rank, we will show that the businesses that have predictable and proven earnings are usually also simple businesses that an average person could understand.

GuruFocus conducted a back test study of Warren Buffett's strategy of "buying good companies at fair prices" for the years from 1998-2008.

ThredUp Predictability Rank Calculation

In our database there are 2403 stocks that have been traded from Jan. 2, 1998 to Aug. 31, 2008. We have the complete 10-year financial data and trading prices of these companies for this period. We rank the predictability of these companies based on the consistency of their revenue per share and EBITDA (earning before interest, tax, depreciation and amortization) per share over the past ten fiscal years, and study the correlation between the stock performances and the predictability of the business.

Our study may be subject to these biases and assumptions:

Dividend yields are not counted for investment returns
Effects of price changes due to spin-offs may not be fully adjusted
Study is subjected to survivorship bias due to de-listing, bankruptcy, LBO, M&A, etc.

The correlation between business predictability and investment returns of a company is showed below.

Correlation Between Business Predictability and Investment Returns

	Predictables	Non-Predictable	All stocks
Total Number of stocks	570	1833	2403
Total Lost Money	61	830	891
Total Lost More Than 50%	18	412	430
Total Lost More Than 90%	4	86	90
Average Gain	260.6%	100.0%	138.1%
Median Gain	150.0%	13.0%	39.0%
Maximum Gain	2852.0%	11483.0%	11483.0%
Maximum Loss	-100.0%	-100.0%	-100.0%
Annualized Average Gain	12.7%	6.7%	8.4%
Annualized Median Gain	8.9%	1.1%	3.1%

For the 570 predictable companies, we have seen strong correlation between the predictability of businesses and the stock performances over the past 10 years, regardless of the valuation of business at 1998. Accordingly, we have ranked the business predictability from 5-star to 1-star, as shown in this table.

Predictability Rank	5-Star	4.5-Star	4-Star	3.5-Star	3-Star	2.5-Star	2-Star	1-Star (non-predictable)	Average among all
% Out of All 2403 Stocks	3.3%	2.9%	3.7%	3.3%	3.3%	3.7%	3.3%	76.3%	100%
% that are in Loss (10y)	3%	10%	8%	9%	11%	18%	16%	45%	37%
Average Gain (10y)	364.6%	330.9%	278.0%	235.1%	243.5%	227.8%	154.8%	100.0%	138.1%
Median Gain (10y)	238.5%	193.5%	171.0%	159.0%	132.5%	113.5%	87.0%	13.0%	39.0%
Maximum Gainer	2228.0%	2547.0%	2452.0%	2852.0%	2432.0%	1892.0%	1807.0%	11483.0%	11483.0%
Maximum Loser	-82.0%	-53.0%	-67.0%	-100.0%	-83.0%	-100.0%	-78.0%	-100.0%	-100.0%
Annualized Average Gain	15.4%	14.6%	13.2%	12.0%	12.2%	11.7%	9.1%	6.7%	8.4%
Annualized Median Gain	12.1%	10.6%	9.8%	9.3%	8.2%	7.3%	6.0%	1.1%	3.1%

For detailed information about each predictability rank, please go to GuruFocus Research: What worked in the market from 1998-2008? Part I: Introduction of Predictability Rank

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ThredUp (ThredUp) Business Description

Industry

GURUFOCUS.COM » STOCK LIST » Consumer Cyclical » Retail - Cyclical » ThredUp Inc (NAS:TDUP) » Definitions » Predictability Rank

Comparable Companies

Traded in Other Exchanges

6XV:Germany

Address

969 Broadway, Suite 200, Oakland, CA, USA, 94607

Website

https://www.thredup.com

ThredUp Inc is an online resale platform for women and kids apparel, shoes, and accessories. It generates revenue from items that are sold to buyers through the website, mobile app, and RaaS partners.

Executives

James G. Reinhart	director, officer: Chief Executive Officer	969 BROADWAY, SUITE 200, OAKLAND CA 94607
Anthony Salvatore Marino	officer: President	969 BROADWAY, SUITE 200, OAKLAND CA 94607
Patricia Nakache	director, 10 percent owner	325 SHARON PARK DR., #458, MENLO PARK CA 94025
Trinity Tvl X, Llc	10 percent owner	325 SHARON PARK DR., #458, MENLO PARK CA 94025
Daniel J Nova	director, 10 percent owner	C/O HIGHLAND CAPITAL PARTNERS INC, TWO INTERNATIONAL PLACE, BOSTON MA 02110
Alon Rotem	officer: Chief Legal Officer	969 BROADWAY, SUITE 200, OAKLAND CA 94607
Sean Sobers	officer: Chief Financial Officer	3450 W. WARREN AVENUE, FREMONT CA 94538
Christopher Homer	officer: Chief Operating Officer	969 BROADWAY, SUITE 200, OAKLAND CA 94607
Ian Friedman	director	C/O HIGHLAND TRANSCEND PARTNERS I CORP., 16 FAYERWEATHER ST, CAMBRIDGE MA 02138
Jack R Lazar	director	400 W. CESAR CHAVEZ, ATTN: STOCK ADMINISTRATION, AUSTIN TX 78701
Rushing Coretha M	director	C/O EQUIFAX INC., 1550 PEACHTREE STREET NW, ATLANTA GA 30309
Highland Management Partners Viii Limited Partnership	10 percent owner	ONE BROADWAY, 16TH FLOOR, CAMBRIDGE MA 02142
Highland Management Partners Viii Ltd	10 percent owner	ONE BROADWAY, 16TH FLOOR, CAMBRIDGE MA 02142
Highland Capital Partners Viii Limited Partnership	10 percent owner	ONE BROADWAY, 16TH FLOOR, CAMBRIDGE MA 02142
Highland Capital Partners Viii-b Limited Partnership	10 percent owner	ONE BROADWAY, 16TH FLOOR, CAMBRIDGE MA 02142