SP ACTION POST THE EARNINGS CALL NEXT WEEK, page-24

Hi pooman1,

An earning surprise is still possible. In their case, it would probably come from the currency effect, as discussed by other people here. But, I am quite confident about the earning forecast, as the main elements are still there to justify growth of their sales and earnings to continue.

The main risk I see is more about long term rates. If they continue to increase (in particular US 10 year treasury), it will affect the valuation of most of the growth stocks.
Good thing anyway about Redbubble is the existing valuation. It remains a rather cheap growth stock with a free cash flow yield estimated around 6 % (at 7 $). With such a valuation for a growth stock, an increase of long term rates (if limited) will limit the upside, but would not justify a significant correction of the stock.

Another medium term risk we still need to watch is the arrival of new competitors. Difficult to think that RBL is not going to attract new competitors given the level of profit, free cash flow and returns it is now generating.
However, the history of RBL has shown that their model is not that easy to copy, as a lot of different actors are involved in their models and it took a long time for RBL to find the right balance.