(Bloomberg) -- RealReal Inc. shares climbed in pre-market trading as the seller of secondhand luxury goods topped Wall Street estimates in its debut quarter as a public company.

“RealReal was solid out of the gate,” Credit Suisse Securities analyst Michael Binetti wrote.

The quarter’s highlight was the 40% year-over-year gain in gross merchandise volume, a key measure for online retailers. That metric signals strong demand for the reseller of luxury goods, analysts said. Meanwhile, sales increased 51% from the year-ago period.

Shares gained 10% in trading before the opening bell, which will stop their downward trajectory since the 45% surge on the June 28 opening day. The stock has dropped 15% since the debut.

Cowen, Oliver Chen

“Gross merchandise volume (GMV) growth was impressive at 40%.”

Chen flags management’s comments that promotional trends so far in the current quarter are improving, which should lead to better average order value.

“We are most encouraged by REAL’s ability to drive high repeat purchases among its loyal customer base and its progress with automation, which is critical to achieving profitability and driving scale.”

Rates the stock outperform and maintained his price target of $32.

Credit Suisse, Michael Binetti

“Our view was that it’s key for REAL to show upside to top line consensus expectations and progress towards the long path to profitability. REAL delivered on both.”

REAL is in a “solid position” to continue driving upward revisions to Wall Street estimates throughout the year, even if the company decides to “spend back” some revenue upside in order to fund new customer growth.

Rates outperform, price target $30.

KeyBanc, Edward Yruma

“Performance during the 2Q points to the strength of its product mix” such as handbags, jewelry, watches.

Yruma expects RealReal’s annual marketing spend will be below 16% of sales this year, down from more than 30% of sales as recently as 2016.

“Marketing is key to REAL’s long-term model and for the company to achieve our expectation of break-even Ebitda by 2022.”

Rates overweight, price target $31.

To contact the reporter on this story: Janet Freund in New York at jfreund11@bloomberg.net

To contact the editors responsible for this story: Catherine Larkin at clarkin4@bloomberg.net, Will Daley

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