Here’s Optimist Fund’s Views on ThredUp (TDUP)

Soumya Eswaran

Tue, May 19, 2026 at 9:18 AM EDT 3 min read

Optimist Fund, an investment management company, released its first-quarter 2026 investor letter. A copy of the letter can be downloaded here. The Fund’s objective is to achieve capital growth at a rate in the mid-teens or higher over the course of several decades. In Q1 2026, the Fund declined 27.3%, driven by a swift shift in the market narrative amid fears of AI disruption and the outbreak of war in Iran. The fund views this drawdown as an opportunity to strengthen the core holdings at more attractive prices. In addition, please check the Fund’s top five holdings to know its best picks in 2026.

In its first-quarter 2026 investor letter, Optimist Fund highlighted stocks like ThredUp Inc. (NASDAQ:TDUP). ThredUp Inc. (NASDAQ:TDUP) is a resale platform that allows the users to buy and sell primarily secondhand apparel, shoes, and accessories. On May 18, 2026, ThredUp Inc. (NASDAQ:TDUP) closed at $4.07 per share. One-month return of ThredUp Inc. (NASDAQ:TDUP) was -4.24%, and its shares lost 43.31% over the past 52 weeks. ThredUp Inc. (NASDAQ:TDUP) has a market capitalization of $525.19 million.

Optimist Fund stated the following regarding ThredUp Inc. (NASDAQ:TDUP) in its Q1 2026 investor letter:

"ThredUp Inc. (NASDAQ:TDUP) – ThredUp’s share price has been extremely weak over the past six months despite continued strength in the underlying business. Notably, recent financial performance has increased our confidence in our five-year target of $30+ per share. We view this disconnect between price and fundamentals as a compelling opportunity and added to the position during the quarter.

Q4 results reinforced the accelerating momentum we highlighted last quarter. Revenue grew ~18% year over year, while new buyer growth accelerated to +57%. The company guided to 13% revenue growth and 160 basis points of EBITDA margin expansion in 2026, both ahead of consensus expectations. We view this as a conservative starting point. For context, the company entered 2025 guiding to 6% growth and ultimately delivered 18%.

Taken together, these results support our view that ThredUp remains in the early stages of a multi-year inflection, where growth and profitability scale in tandem. We believe the company’s long-term earnings power remains materially underappreciated. ThredUp continues to be a top holding."

ThredUp Inc. (NASDAQ:TDUP) is not on our list of 40 Most Popular Stocks Among Hedge Funds Heading Into 2026. According to our database, 40 hedge fund portfolios held ThredUp Inc. (NASDAQ:TDUP) at the end of the fourth quarter, up from 31 in the previous quarter. In Q1 2026, ThredUp Inc.'s (NASDAQ:TDUP) revenue grew 14.6% year over year to $81.7 million. While we acknowledge the potential of ThredUp Inc. (NASDAQ:TDUP) 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.