RealReal: Post-Turnaround Growth, Expanding Margins, and Data-Driven Upside Support Buy Rating and $20 Target

Analyst Bobby Brooks from Northland Securities maintained a Buy rating on RealReal and increased the price target to $20.00 from $16.00.

Bobby Brooks has given his Buy rating due to a combination of factors tied to RealReal’s growth trajectory and improving profitability profile. He expects the company to sustain double-digit revenue expansion into 2027, led primarily by solid growth in its core consignment business, while maintaining strong gross margins. At the same time, he anticipates meaningful operating leverage, with key cost categories such as operations, technology, and SG&A declining as a percentage of revenue, driving a notable improvement in adjusted EBITDA margins and a sharp increase in free cash flow. These forecasts support his higher price target of $20, which is based on applying a 3.0x multiple to his 2027 revenue estimate.

Bobby Brooks’s rating is based on his view that RealReal is structurally well positioned within the luxury resale market following a successful turnaround and sharpened focus on consignment. He highlights the company’s scale as the largest online marketplace for authenticated luxury goods, its long-built brand trust around authenticity, and its extensive proprietary data on both genuine and counterfeit items as key competitive advantages. He also sees incremental upside from better utilization of this data and AI-driven tools like ATHENA to further enhance efficiency and margins over time. In his long-term framework, he envisions a company capable of sustaining at least double-digit growth with EBITDA margins potentially expanding toward the mid-teens to 20%, implying meaningful upside beyond his current target price.

In another report released yesterday, Wells Fargo also maintained a Buy rating on the stock with a $22.00 price target.

Based on the recent corporate insider activity of 58 insiders, corporate insider sentiment is negative on the stock. This means that over the past quarter there has been an increase of insiders selling their shares of REAL in relation to earlier this year.