RealReal (REAL) AI Stock Analysis

• Market Cap: $871.19M
• Dividend Yield: N/A
• Average Volume (3M): 3.93M
• Price to Earnings (P/E): ―
• Beta (1Y): 2.24
• Revenue Growth: 12.68%
• EPS Growth: 62.96%
• Country: US
• Employees: 3,011
• Sector: Consumer Cyclical
• Sector Strength: 80
• Industry: Luxury Goods
• EPS (TTM): -0.06
• Shares Outstanding: 115,237,274
• 10 Day Avg. Volume: 4,089,986
• 30 Day Avg. Volume: 3,925,850
• PEG Ratio: N/A
• Price to Book (P/B): N/A
• Price to Sales (P/S): N/A
• P/FCF Ratio: N/A
• Enterprise Value/Market Cap: 1.09
• Enterprise Value/Revenue: 1.49
• Enterprise Value/Gross Profit: 2.00
• Enterprise Value/Ebitda: 53.46
• 1Y Price Target: $10.00
• Price Target Upside: 31.06% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 5

• Rating: 58 Neutral
• Price Target: $8.50 ▲(11.40% Upside)

RealReal's overall stock score is driven by significant financial challenges, including negative profitability and high leverage. However, strong technical indicators and positive earnings call sentiment provide some optimism. The strategic debt restructuring further supports a slightly improved outlook.

Positive Factors

Balance Sheet Improvement

Over the past 12+ months, REAL has worked to strengthen its balance sheet position through a series of debt exchanges that have reduced total debt by $54M, pushed out maturity risk to 2028 and beyond and smoothed out its maturity cycle.

Operational Efficiency

REAL posted another quarter of solid EBITDA growth, demonstrating massive scale by utilizing AI and improving fulfillment costs.

Revenue Growth

2Q was exactly what Bulls wanted with a material beat on both revenues and EBITDA.

Negative Factors

Financial Performance

1Q results were only in line and their FY plan was only reiterated, viewed as a 'good...not great, print.'

RealReal Business Overview & Revenue Model

Company Description

The RealReal, Inc. (REAL) is a leading online marketplace for authenticated luxury consignment, specializing in the resale of high-end fashion, accessories, and home goods. Founded in 2011, the company operates in the e-commerce sector, focusing on the circular economy by providing a platform for consumers to buy and sell pre-owned luxury items. The RealReal offers a wide range of products from renowned brands, ensuring authenticity through expert authentication and quality control processes.

How the Company Makes Money

The RealReal generates revenue primarily through its consignment model, where it takes a commission on the sale of items sold on its platform. Sellers can list their luxury goods, and once sold, The RealReal retains a percentage of the sale price as a fee, which can vary based on the item's value and the seller's terms. Additionally, the company earns revenue from direct sales of luxury goods that it purchases outright, allowing it to maintain a diverse inventory. Significant partnerships with luxury brands and influencers enhance its market presence and drive traffic to its platform. The RealReal also offers services such as white-glove pickup and delivery, further enhancing customer experience and loyalty, which can contribute to increased sales and revenue.

RealReal Financial Statement Overview

Summary

RealReal's financial performance is challenged by negative net profit margins and high leverage, indicating financial instability. Despite some revenue growth, the negative equity and cash flow issues highlight significant financial risks.

Income Statement

RealReal's income statement shows a mixed performance. The company has achieved a positive revenue growth rate of 3.28% TTM, indicating some top-line growth. However, profitability remains a concern with negative net profit margins (-5.55% TTM) and EBIT margins (-0.87% TTM), reflecting ongoing operational challenges. Despite a strong gross profit margin of 74.65% TTM, the company struggles to convert this into net profitability.

Balance Sheet

The balance sheet reveals significant financial leverage with a negative debt-to-equity ratio (-1.40 TTM), indicating more debt than equity. The negative stockholders' equity suggests potential financial instability. Return on equity is positive at 9.91% TTM, but this is due to the negative equity base, which can be misleading. Overall, the balance sheet highlights financial risk and limited equity cushion.

Cash Flow

Cash flow analysis shows challenges in generating free cash flow, with a negative free cash flow growth rate of -12.20% TTM. The operating cash flow to net income ratio is low at 0.03 TTM, indicating limited cash generation relative to net income. The free cash flow to net income ratio is significantly negative, suggesting cash flow issues. Overall, cash flow management needs improvement to support operations and growth.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	636.97M	600.48M	549.30M	603.49M	467.69M	298.27M
Gross Profit	475.48M	447.52M	376.28M	348.69M	273.48M	185.88M
EBITDA	17.79M	-79.44M	-125.79M	-138.53M	-171.55M	-135.56M
Net Income	-35.36M	-134.20M	-168.47M	-196.44M	-236.11M	-175.83M
Balance Sheet
Total Assets	349.38M	423.10M	446.92M	615.64M	754.94M	605.11M
Cash, Cash Equivalents and Short-Term Investments	94.34M	172.21M	175.71M	293.79M	418.17M	354.86M
Total Debt	473.09M	546.55M	577.37M	595.74M	509.79M	279.27M
Total Liabilities	687.63M	830.47M	750.22M	785.73M	681.82M	413.82M
Stockholders Equity	-338.24M	-407.38M	-303.30M	-170.09M	73.13M	191.29M
Cash Flow
Free Cash Flow	-23.06M	798.00K	-103.40M	-128.48M	-189.59M	-161.35M
Operating Cash Flow	5.23M	26.85M	-61.27M	-91.56M	-142.15M	-132.76M
Investing Cash Flow	-32.00M	-25.59M	-42.13M	-36.92M	-43.44M	176.35M
Financing Cash Flow	-29.68M	-4.76M	226.00K	4.10M	252.91M	152.81M

RealReal Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 7.63
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Positive
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For REAL, the sentiment is Positive. The current price of 7.63 is above the 20-day moving average (MA) of 6.95, above the 50-day MA of 5.99, and above the 200-day MA of 6.53, indicating a bullish trend. The MACD of 0.52 indicates Positive momentum. The RSI at 62.01 is Neutral, neither overbought nor oversold. The STOCH value of 27.16 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for REAL.

RealReal Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
SIG	71 Outperform	$3.61B	92.45	2.04%	1.31%	-3.98%	-93.50%
BRLT	66 Neutral	$176.45M	―	-2.83%	18.12%	-4.32%	-144.96%
MOV	63 Neutral	$269.18M	21.25	3.67%	7.99%	-1.36%	-54.97%
LUXE	63 Neutral	$706.00M	―	-8.75%	―	7.08%	-42.22%
Sector *	61 Neutral	$17.75B	12.56	-5.49%	3.02%	1.43%	-14.12%
REAL	58 Neutral	$871.19M	―	32.94%	―	12.68%	62.96%
LANV	41 Neutral	$267.06M	―	-195.94%	―	-22.86%	-38.76%

RealReal Corporate Events

RealReal Announces Strategic Debt Exchange Transactions

On August 20, 2025, The RealReal announced strategic debt exchange transactions, exchanging $49.5 million of its 1.00% Convertible Senior Notes due 2028 for 4.00% Convertible Senior Notes due 2031, reducing its total debt by over $6 million. This move is part of the company’s efforts to strengthen its capital structure and extend its debt maturity profile, enhancing its operational flexibility and positioning it for continued growth.

Carol Melton Resigns from RealReal Board

On July 17, 2025, Carol Melton resigned from the Board of Directors of The RealReal, Inc. due to her expanded professional and personal responsibilities. The company expressed gratitude for her valued service during her tenure.

RealReal Holds Annual Stockholders Meeting on June 11

On June 11, 2025, The RealReal, Inc. held its annual stockholders meeting where several key proposals were voted on. Stockholders elected Class III directors for a three-year term and ratified KPMG LLP as the independent accounting firm for 2025. They approved executive compensation but did not pass proposals to amend the company’s certificate of incorporation regarding board declassification and officer liability limits.