Despite a slightly flatter revenue/margin trajectory outlook, we remain optimistic that ATRenew's differentiated pre-owned consumer electronics transactions and services platform in China will continue to drive outsized growth in transaction volumes, sales, fees, and profits over the long run. While RERE has meaningfully outperformed recently, we believe current levels for the stock still provide investors with an attractive entry point, as awareness and appreciation of the company's business model, growth prospects, competitive positioning, and valuation disconnect increasingly take hold. Despite what we believe to be conservative inputs/assumptions, our DCF model suggests a wide disconnect between ATRenew's fundamentals and the stock's current price. Furthermore, at ~6x our 2025 adjusted EPS estimate, RERE continues to trade at a meaningful P/E discount to most peer stocks.
