Shares of the Digital Brands Group, Inc. (DBGI) stock were rising in the current market trading session today on January 20, 2022. DBGI stock price saw a push of 3.00% to reach $1.37 a share at the time of this writing. The trading volume on the last check was 5,142,431, higher than the average trading volume. Let’s take a closer look to understand the reason behind this bull.

What’s Happening with DBGI stock?

DBGI stock has captivated the attention of investors in the current market after the company announced the acquisition of Sundry. Digital Brand Group today announced that it has entered into the definitive merger agreement under which it will acquire Sundry, which is a privately-owned global lifestyle apparel brand. The company expects to complete the transaction in the first of the ongoing year subject to financing and customary closing conditions.

Highlights of Sundry Acquisition

• DBGI expects that this acquisition will positively impact the revenues and internal cash flows because of the shared expenses in both marketing and operations.
• The acquisition will increase brand awareness as well as customer demand. This will help the company in its future growth, a good sign for the shareholders of DBGI stock.
• Another goal which company expects to achieve through this acquisition is to create significant synergies between all its portfolio. This will result in low customer acquisition costs, customer retention and annual spending per customer as well as higher lifetime value.

Financial View of DBGI stock

The company on January 7, 2022, provided a net revenue update for the fourth quarter and fiscal 2021. The company also reaffirmed previously announced 2022 net revenue and EBITDA guidance. Digital Brands expects that its fourth-quarter revenue will come in line with its previously forecasted revenue of approximately $4.0 million. The company reported that the global supply chain disruptions have slightly impacted the revenue.

The company expects that its revenue for the fiscal year 2021 will increase by 44% to $7.6 million. The previous year’s revenue was $5.2 million for the DBGI stock. The company has not recognized the revenue from Harper & Jones or Stateside for the fiscal year 2021. It is because these brands were acquired during the fiscal year 2021.

Outlook

The company reaffirmed the previous guidance of $37.5 million to $42.5 million for the fiscal year 2022. This represents the whooping growth of 350% from the fiscal year 2021 net revenue. In a nutshell, DBGI stock can be a good bet for long-term investors.