Optimist Fund Adds to ThredUp Amid Market Drawdown
Despite a 27.3% decline in its first-quarter 2026 performance, Optimist Fund increased its stake in the resale platform, maintaining a five-year price target of $30 per share.
Optimist Fund released its first-quarter 2026 investor letter, reporting a 27.3% decline in fund performance driven by shifting market narratives surrounding artificial intelligence disruption and the outbreak of war in Iran. Rather than retreating, the fund viewed the broader market drawdown as an opportunity to strengthen core holdings at more attractive valuations. Among its key moves, Optimist Fund added to its position in ThredUp Inc (NASDAQ:TDUP), identifying a significant disconnect between the company’s weakened share price and its underlying business strength.
ThredUp, a resale platform for secondhand apparel and accessories, has seen its shares decline sharply over the past year. As of 18 May 2026, the stock closed at $4.07 per share, marking a 43.31% loss over the preceding 52 weeks and a 4.24% drop in the last month. The company’s market capitalisation stands at $525.19 million. Despite this volatility, Optimist Fund highlighted that recent financial results have reinforced its confidence in the company’s long-term trajectory.
The fund pointed to ThredUp’s fourth-quarter results as evidence of accelerating momentum, noting revenue growth of approximately 18% year-on-year and a 57% increase in new buyers. For context, the company entered 2025 with guidance for 6% growth but ultimately delivered 18%. In the first quarter of 2026, ThredUp reported revenue of $81.7 million, representing a 14.6% year-on-year increase. Optimist Fund described these results as supporting the view that the company is in the early stages of a multi-year inflection point where growth and profitability scale in tandem.
Looking ahead, ThredUp has guided for 13% revenue growth and 160 basis points of EBITDA margin expansion in 2026, figures the fund considers conservative and ahead of consensus expectations. Based on this trajectory, Optimist Fund maintains a five-year price target of $30 per share for ThredUp. The fund explicitly stated that it views the current valuation as a compelling opportunity, believing the company’s long-term earnings power remains materially underappreciated by the market.
While ThredUp remains a top holding for Optimist Fund, the broader institutional interest in the stock has grown. Data indicates that 40 hedge fund portfolios held ThredUp at the end of the fourth quarter, an increase from 31 in the previous quarter. However, the fund noted that while it acknowledges ThredUp’s potential, it believes certain artificial intelligence stocks currently offer greater upside potential with less downside risk.
