By Dhirendra Tripathi

Investing.com – Poshmark (NASDAQ:) stock traded 4% lower Friday after Stifel downgraded it to ‘hold’ with a target of $15.

Analyst Scott Devitt earlier had a ‘buy’ on the stock with a target of $19, according to StreetInsider. In the first session, the stock dropped to $12.

Devitt acknowledged that there are many challenges facing the company, including a low share price and potential for 20%+ margins. He also noted its good attributes, such as an asset-light business model, high user engagement, and 20+ percent profit potential.

According to the analyst, Apple’s privacy changes have dampened the effectiveness of the company’s marketing investments, resulting in slower user growth and higher marketing costs while Poshmark’s international expansion is yet to materialize.

Initial market launches have fallen short of the management’s expectations as well as the assumptions underpinning Stifel’s model, the analyst wrote.

Devitt indicated that they prefer other names such as Amazon (NASDAQ), Etsy(NASDAQ:), and Shopify.

Poshmark announced its fourth quarter results on March 22.

This was an increase of 22% and reached $84 Million. Gross merchandise value is the total of all products and services purchased on an online platform. It grew by 27% to nearly $491million.

The company anticipates that revenue will be between $86 and $88 million in the current quarter.