Revolve (RVLV) Declined Due to Management's Comments

Optimist Fund, an investment management company, released its second-quarter 2025 investor letter. A copy of the letter can be downloaded here. The quarter was characterized by the Optimist Fund’s strongest quarter of investment performance since its inception. The results proved the firm was true to its strategy, investing in underappreciated, market-leading businesses led by ambitious CEOs with long runways for growth. The fund returned 39.2% in Q2 compared to 11.3% for its benchmark. In addition, you can check the fund’s top 5 holdings to determine its best picks for 2025.

In its second-quarter 2025 investor letter, Optimist Fund highlighted stocks such as Revolve Group, Inc. (NYSE:RVLV). Revolve Group, Inc. (NYSE:RVLV) is an online fashion retailer for millennial and Generation Z consumers. The one-month return of Revolve Group, Inc. (NYSE:RVLV) was 11.31%, and its shares lost 2.78% of their value over the last 52 weeks. On September 15, 2025, Revolve Group, Inc. (NYSE:RVLV) stock closed at $23.82 per share, with a market capitalization of $1.698 billion.

Optimist Fund stated the following regarding Revolve Group, Inc. (NYSE:RVLV) in its second quarter 2025 investor letter:

"Revolve Group, Inc. (NYSE:RVLV) was the only position in the portfolio that declined during the quarter, largely due to management’s comments about a slowdown to mid-single digit revenue growth in April—down from double digits the month prior—as well as initial guidance on tariff impacts. Since then, the company has indicated a return to double-digit growth and noted that cost headwinds are now more limited following a reduction in China-related tariffs. Despite this, the stock has remained under pressure. We’ve taken the opportunity to add to our position at what we believe are highly attractive valuations."

Revolve Group, Inc. (NYSE:RVLV) is not on our list of 30 Most Popular Stocks Among Hedge Funds. According to our database, 21 hedge fund portfolios held Revolve Group, Inc. (NYSE:RVLV) at the end of the second quarter, compared to 21 in the previous quarter. In the second quarter of 2025, Revolve Group, Inc. (NYSE:RVLV) generated net sales of $309 million, reflecting a year-over-year increase of 9%. While we acknowledge the potential of Revolve Group, Inc. (NYSE:RVLV) as an investment, we believe certain AI stocks offer greater upside potential and carry less downside risk. If you're looking for an extremely undervalued AI stock that also stands to benefit significantly from Trump-era tariffs and the onshoring trend, see our free report on the best short-term AI stock.

In another article, we covered Revolve Group, Inc. (NYSE:RVLV) and shared Polen U.S. Small Company Growth Strategy's views on the company. In addition, please check out our hedge fund investor letters Q2 2025 page for more investor letters from hedge funds and other leading investors.

READ NEXT: The Best and Worst Dow Stocks for the Next 12 Months and 10 Unstoppable Stocks That Could Double Your Money.

Disclosure: None. This article is originally published at Insider Monkey.