RealReal’s Resurgence: Strong Growth, Surpassing Earnings, and Strategic Optimism Drive ‘Buy’ Rating

Wells Fargo analyst Ike Boruchow reiterated a Buy rating on RealReal (REAL – Research Report) yesterday and set a price target of $15.00.

Ike Boruchow has given his Buy rating due to a combination of factors suggesting a positive future for RealReal. Firstly, the company has demonstrated a notable rebound in growth, with Gross Merchandise Value (GMV) returning to double-digit increases for the first time in over two years, accompanied by a consistent rise in margins over six consecutive quarters. This indicates a strengthening business model and enhanced financial performance.
Furthermore, RealReal’s recent preliminary earnings announcement surpassed market expectations, with projected fourth-quarter revenue growth of 14-15% and an adjusted EBITDA of approximately $11 million, both outperforming analysts’ estimates. The strategic steps the company has taken, such as reducing liquidity risk through debt exchanges and transitioning towards a more sustainable profitability model, have been pivotal. These efforts are expected to continue driving momentum into 2025, reinforcing the company’s position and underpinning Boruchow’s optimistic outlook.

According to TipRanks, Boruchow is a 3-star analyst with an average return of 0.6% and a 46.79% success rate. Boruchow covers the Consumer Cyclical sector, focusing on stocks such as Tapestry, Capri Holdings, and TJX Companies.

In another report released yesterday, BTIG also maintained a Buy rating on the stock with a $9.00 price target.