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RealReal (REAL)
NASDAQ:REAL
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RealReal
(NASDAQ:REAL)
Rating:47Neutral
Price Target:
$5.50
▲(14.58%Upside)
Positive Factors
Financial Position
REAL has strengthened its balance sheet by reducing total debt and extending maturity risk to 2028 and beyond.
Revenue Growth
REAL has returned to double-digit top-line growth for the first time in over two years, with compelling implied margin flow-through indicating material incremental margins on the revamped business model.
Technological Advancements
AI advancements in authentication, photography, pricing, and cataloguing are expected to help reduce lead times and increase profitability.
Negative Factors
Earnings Performance
1Q results were only in line and their FY plan was merely reiterated, viewed as a 'good...not great, print.'
Shareholder Impact
Existing shareholders will be diluted by approximately 9% should the 2031 Notes rise above the conversion price.
RealReal (REAL) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$550.77M
Dividend YieldN/A
Average Volume (3M)2.93M
Price to Earnings (P/E)―
Beta (1Y)2.49
Revenue Growth11.89%
EPS Growth66.22%
CountryUS
Employees3,011
SectorConsumer Cyclical
Sector Strength54
IndustryLuxury Goods
Share Statistics
EPS (TTM)-0.08
Shares Outstanding113,095,330
10 Day Avg. Volume3,093,983
30 Day Avg. Volume2,932,435
Financial Highlights & Ratios
PEG Ratio10.12
Price to Book (P/B)19.10
Price to Sales (P/S)0.00
P/FCF Ratio-73.15
Enterprise Value/Market Cap11.48
Enterprise Value/Revenue2.68
Enterprise Value/Gross Profit14.24
Enterprise Value/Ebitda-66.83
Forecast
1Y Price Target
$10.50Price Target Upside118.75% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering5
RealReal Business Overview & Revenue Model
Company DescriptionRealReal (REAL) is a leading online marketplace for authenticated, luxury consignment goods. The company operates in the e-commerce sector, providing a platform where individuals can buy and sell pre-owned, high-end fashion items, fine jewelry, watches, home decor, and art. RealReal ensures the authenticity of each item through a rigorous verification process conducted by a team of experts, offering a trustworthy marketplace for luxury goods.
How the Company Makes MoneyRealReal primarily makes money through consignment sales on its platform. The company earns revenue by taking a commission on each sale, which varies depending on the category of the item and the consignment agreement. Sellers send their luxury items to RealReal, where they are authenticated, photographed, and listed for sale. Once an item is sold, RealReal takes its commission and pays the remaining amount to the consignor. Additionally, the company may generate revenue through partnerships and collaborations with luxury brands, offering them a channel for selling excess inventory or exclusive products. RealReal's revenue model is supported by its investment in technology and logistics, which enhances the buying and selling experience for its users.
RealReal Earnings Call Summary
Earnings Call Date:May 08, 2025
(Q1-2025)
| % Change Since: -34.16%|
Next Earnings Date:Aug 12, 2025
Earnings Call Sentiment Positive
The earnings call presents a positive outlook for the RealReal with strong revenue growth and profitability improvements, driven by strategic initiatives and operational efficiencies. Despite some challenges with operating cash flow and macroeconomic uncertainties, the highlights significantly outweigh the lowlights, indicating a successful start to the year.Q1-2025 Updates
Positive Updates
Record-Breaking Revenue and Growth
In Q1 2025, GMV increased by 9% and revenue increased by 11% year-over-year, aligning with the company's goal of high-single-digit to low-double-digit growth. Active buyers also increased by 7% on a trailing 12-month basis.
Improved Profitability and Margins
Adjusted EBITDA increased to a positive $4 million, an increase of $6 million versus Q1 of last year. Gross margin improved by 40 basis points year-over-year.
New Consignor Growth
The company delivered its highest number of new consignors in over two years, with innovative strategies contributing significantly to new consignor acquisition.
Successful Strategic Initiatives
The growth playbook initiatives, including sales, marketing, and stores, drove healthy supply trends. The Real Partners and Get Paid Now programs are generating substantial supply growth.
Operational Efficiency with AI
The Athena AI-enabled product intake process reduces costs and improves efficiency, processing more than 10% of items with an estimated 20% reduction in processing times.
Negative Updates
Operating Cash Flow Challenges
Operating cash flow for the first quarter was negative $28 million due to the timing of incentive payments and working capital seasonality.
Potential Macroeconomic Challenges
Acknowledgment of potential challenges arising from a more uncertain macroeconomic environment, although the company maintains a balanced perspective.
Company Guidance
During the call, the RealReal reaffirmed its full-year 2025 guidance and reported strong Q1 results, with GMV increasing by 9% to $490 million and revenue up 11% year-over-year to $160 million. The company achieved a 7% increase in active buyers, and the average order value rose by 5% to $564. Gross margin improved by 40 basis points to 75%, and adjusted EBITDA reached a positive $4 million, marking a $6 million increase from the previous year. The RealReal highlighted its strategic pillars of unlocking supply, driving operational efficiencies, and enhancing service, which contributed to the highest number of new consignors in over two years. The company expects full-year GMV between $1.96 billion and $1.99 billion and revenue between $645 million and $660 million, with adjusted EBITDA projected to be between $20 million and $30 million.RealReal Financial Statement Overview
Summary
RealReal faces significant financial challenges with negative margins and equity, indicating sustainability issues. High debt levels and negative free cash flow illustrate financial instability despite slight improvements in certain metrics.Income Statement
The company shows a decline in revenue growth with a recent TTM increase of 2.7% overshadowed by past volatility. Gross profit margins have improved, but negative EBIT and net profit margins indicate ongoing operational challenges.45
Neutral
Balance Sheet
High debt-to-equity ratio and negative stockholders' equity demonstrate financial instability. The equity ratio is negative, highlighting reliance on debt financing.30
Negative
Cash Flow
The company struggles with negative free cash flow and fluctuating operating cash flow, though there is a slight improvement in cash flow efficiency relative to net income.40
Negative
| Breakdown | TTM | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|---|---|
Income Statement | ||||||
| Total Revenue | 616.72M | 600.48M | 549.30M | 603.49M | 467.69M | 298.27M |
| Gross Profit | 443.79M | 447.52M | 376.28M | 348.69M | 273.48M | 185.88M |
| EBITDA | 28.65M | -79.44M | -109.05M | -138.53M | -171.55M | -135.56M |
| Net Income | -40.70M | -134.20M | -168.47M | -196.44M | -236.11M | -177.51M |
Balance Sheet | ||||||
| Total Assets | 400.37M | 423.10M | 446.92M | 615.64M | 754.94M | 605.11M |
| Cash, Cash Equivalents and Short-Term Investments | 139.60M | 172.21M | 175.71M | 293.79M | 418.17M | 354.86M |
| Total Debt | 504.31M | 546.55M | 577.37M | 595.74M | 509.79M | 279.27M |
| Total Liabilities | 736.44M | 830.47M | 750.22M | 785.73M | 681.82M | 413.82M |
| Stockholders Equity | -336.07M | -407.38M | -303.30M | -170.09M | 73.13M | 191.29M |
Cash Flow | ||||||
| Free Cash Flow | -26.26M | 798.00K | -103.40M | -128.48M | -189.59M | -161.35M |
| Operating Cash Flow | 1.98M | 21.55M | -61.27M | -91.56M | -142.15M | -132.76M |
| Investing Cash Flow | -26.13M | -25.59M | -42.13M | -36.92M | -43.44M | 176.35M |
| Financing Cash Flow | -2.36M | -4.76M | 226.00K | 4.10M | 252.91M | 152.81M |
RealReal Technical Analysis
Negative
4.80
Price Trends
5.57
Negative
6.01
Negative
5.87
Negative
Market Momentum
-0.20
Positive
39.31
Neutral
16.09
Positive
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For REAL, the sentiment is Negative. The current price of 4.8 is below the 20-day moving average (MA) of 5.34, below the 50-day MA of 5.57, and below the 200-day MA of 5.87, indicating a bearish trend. The MACD of -0.20 indicates Positive momentum. The RSI at 39.31 is Neutral, neither overbought nor oversold. The STOCH value of 16.09 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for REAL.
RealReal Risk Analysis
RealReal disclosed 57 risk factors in its most recent earnings report. RealReal reported the most risks in the "Finance & Corporate" category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks
RealReal Peers Comparison
Overall Rating
UnderperformOutperform
Sector (67)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
68 Neutral | $3.27B | 86.38 | 2.04% | 1.61% | -3.98% | -93.50% | |
67 Neutral | ¥247.19B | 12.85 | 6.57% | 2.82% | 5.08% | -11.28% | |
65 Neutral | $239.84M | 18.80 | 3.67% | 9.21% | -1.36% | -54.97% | |
63 Neutral | $677.01M | ― | -8.75% | ― | 7.08% | -42.22% | |
47 Neutral | $550.77M | ― | 32.94% | ― | 11.89% | 66.22% | |
47 Neutral | $134.57M | ― | -0.45% | ― | -6.12% | -105.56% | |
41 Neutral | $290.73M | ― | -195.94% | ― | -22.86% | -38.76% |
* Consumer Cyclical Sector Average
Performance Comparison
REAL
RealReal
4.80
1.61
50.47%
MOV
Movado Group
15.47
-7.39
-32.33%
SIG
Signet Jewelers
81.80
-6.28
-7.13%
LUXE
LuxExperience
8.09
2.99
58.63%
LANV
Lanvin Group Holdings
2.04
0.25
13.97%
BRLT
Brilliant Earth Group
1.38
-0.84
-37.84%
RealReal Corporate Events
Executive/Board ChangesShareholder Meetings
RealReal Holds Annual Stockholders Meeting on June 11
Neutral
Jun 13, 2025
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.
The most recent analyst rating on (REAL) stock is a Hold with a $10.00 price target. To see the full list of analyst forecasts on RealReal stock, see the REAL Stock Forecast page.
Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.