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RealReal (REAL)
NASDAQ:REAL
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RealReal
(NASDAQ:REAL)
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Rating:54Neutral
Price Target:
$12.00
▼(-4.84% Downside)
RealReal's overall stock score is primarily influenced by its strong earnings call performance, which highlights operational improvements and future cash flow positivity. However, significant financial performance issues, including high leverage and negative equity, weigh heavily on the score. Technical analysis shows positive momentum, but valuation remains a concern due to ongoing losses.
Positive Factors
Revenue Growth
The consistent revenue growth and record GMV indicate strong market demand and effective business strategies, enhancing long-term market position.
AI and Automation
Investments in AI and automation improve operational efficiency and cost management, providing a durable competitive advantage in the luxury consignment market.
New Consignor Growth
Sustained growth in new consignors expands inventory and enhances platform attractiveness, supporting long-term revenue and market share growth.
Negative Factors
High Leverage
High leverage poses financial risks, limiting flexibility and increasing vulnerability to economic downturns, impacting long-term financial stability.
Negative Operating Cash Flow
Negative operating cash flow indicates challenges in cash generation, which can hinder investment in growth initiatives and impact financial health.
Profitability Concerns
Ongoing profitability issues suggest operational inefficiencies, which could affect long-term sustainability and shareholder value if not addressed.
RealReal (REAL) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$1.45B
Dividend YieldN/A
Average Volume (3M)3.45M
Price to Earnings (P/E)―
Beta (1Y)2.25
Revenue Growth12.68%
EPS Growth62.96%
CountryUS
Employees3,011
SectorConsumer Cyclical
Sector Strength84
IndustryLuxury Goods
Share Statistics
EPS (TTM)-0.06
Shares Outstanding115,237,274
10 Day Avg. Volume3,102,098
30 Day Avg. Volume3,448,371
Financial Highlights & Ratios
PEG Ratio0.36
Price to Book (P/B)-2.89
Price to Sales (P/S)1.96
P/FCF Ratio1.48K
Enterprise Value/Market Cap0.65
Enterprise Value/Revenue1.49
Enterprise Value/Gross Profit2.00
Enterprise Value/Ebitda53.46
Forecast
1Y Price Target
$11.25Price Target Upside-10.79% Downside
Rating ConsensusModerate Buy
Number of Analyst Covering7
RealReal Business Overview & Revenue Model
Company DescriptionThe RealReal, Inc. operates an online marketplace for consigned luxury goods in the United State. It offers various product categories, including women's, men's, kids', jewelry and watches, and home and art products. The company was incorporated in 2011 and is headquartered in San Francisco, California.
How the Company Makes MoneyThe 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 Earnings Call Summary
Earnings Call Date:Aug 07, 2025
(Q2-2025)
| % Change Since: |
Next Earnings Date:Nov 10, 2025
Earnings Call Sentiment Positive
The earnings call highlighted strong financial performance with record GMV and revenue, an increase in new consignors, and positive EBITDA results. The company is also leveraging AI and automation for efficiency gains. Despite a negative operating cash flow, the company has raised its full year guidance and expects positive cash flows in the coming quarters.Q2-2025 Updates
Positive Updates
Record GMV and Revenue
The RealReal reported record GMV at $504 million and record revenue of $165 million, both up 14% year-over-year.
Strong Adjusted EBITDA Performance
Adjusted EBITDA was $6.8 million or 4.1% margin, which was a substantial beat versus expectations.
Increase in New Consignors
The company experienced double-digit growth in new consignors for the second quarter in a row, achieving the highest number of new consignors ever.
Positive Cash Flow Outlook
The company expects to generate strong positive free cash flows in Q3 and Q4, demonstrating the business model's favorable cash dynamics.
AI and Automation Driving Efficiency
The AI-driven Athena system is touching approximately 20% of all units, with plans to reach 30% to 40% by year-end, contributing to operational efficiency gains.
Increased Full Year Guidance
The company raised its full year guidance, now expecting GMV in the range of $2.030 billion to $2.045 billion, and adjusted EBITDA in the range of $29 million to $32 million.
Negative Updates
Negative Operating Cash Flow
Operating cash flow in the second quarter was negative $4 million, although it was a $3 million improvement year-over-year and a $25 million improvement quarter-over-quarter.
Direct Revenue Margin Variability
Direct gross margin was 16.2% in the second quarter, which fluctuates quarterly largely based on the category mix of products sold.
Company Guidance
During the second quarter of 2025, The RealReal reported a 14% increase in both GMV and revenue, reaching $504 million and $165 million, respectively. The company's adjusted EBITDA was a standout, hitting $6.8 million with a 4.1% margin, surpassing expectations. New consignor growth continued to show double-digit increases for the second consecutive quarter, indicating strong supply momentum. The RealReal's ongoing investments in AI and automation, particularly through its Athena system, are expected to touch 30-40% of inventory by year-end, driving operational efficiencies and cost reductions. The company also announced an upward revision in its full-year guidance, anticipating GMV between $2.03 billion and $2.045 billion, and adjusted EBITDA in the range of $29 million to $32 million.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.45
Neutral
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.30
Negative
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.40
Negative
| 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
Positive
12.61
Price Trends
9.84
Positive
7.77
Positive
7.17
Positive
Market Momentum
0.70
Negative
70.19
Negative
88.13
Negative
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 12.61 is above the 20-day moving average (MA) of 11.00, above the 50-day MA of 9.84, and above the 200-day MA of 7.17, indicating a bullish trend. The MACD of 0.70 indicates Negative momentum. The RSI at 70.19 is Negative, neither overbought nor oversold. The STOCH value of 88.13 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for REAL.
RealReal Risk Analysis
RealReal disclosed 56 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
UnderperformOutperform
Sector (61)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
| ― | $228.23M | 26.13 | 15.81% | ― | 25.43% | 33.93% | |
| ― | $262.35M | ― | -2.83% | 10.00% | -4.32% | -144.96% | |
| ― | $783.59M | 1.87 | 61.33% | ― | 51.76% | ― | |
| ― | $18.38B | 12.79 | -2.54% | 3.03% | 1.52% | -15.83% | |
| ― | $1.45B | ― | ― | ― | 12.68% | 62.96% | |
| ― | $2.64B | ― | -142.38% | ― | -16.69% | -279.61% | |
| ― | $260.79M | ― | -2353.49% | ― | -23.54% | -49.41% |
* Consumer Cyclical Sector Average
REAL
RealReal
12.61
9.57
314.80%
CPRI
Capri Holdings
22.21
1.73
8.45%
ELA
Envela
9.31
3.95
73.69%
LUXE
LuxExperience
10.01
2.88
40.39%
LANV
Lanvin Group Holdings
2.12
0.48
29.27%
BRLT
Brilliant Earth Group
2.50
1.05
72.41%
RealReal Corporate Events
Business Operations and StrategyPrivate Placements and Financing
RealReal Announces Strategic Debt Exchange Transactions
Positive
Aug 21, 2025
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.
The most recent analyst rating on (REAL) stock is a Hold with a $8.50 price target. To see the full list of analyst forecasts on RealReal stock, see the REAL Stock Forecast page.
The RealReal’s Record Q2: Growth and Optimism
Aug 13, 2025
The RealReal’s latest earnings call exuded a strong positive sentiment, driven by record-setting GMV and revenue figures, significant improvements in adjusted EBITDA, and robust growth in new consignors. The integration of AI and operational efficiencies further bolstered the positive outlook, despite some concerns about operating cash flow and direct revenue gross margin fluctuations.
The RealReal Reports Strong Q2 2025 Growth
Aug 8, 2025
The RealReal, Inc. is the world’s largest online marketplace for authenticated, resale luxury goods, offering a platform for buying and selling high-end items with a focus on sustainability and the circular economy.
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.