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RealReal (REAL)
NASDAQ:REAL
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RealReal
(NASDAQ:REAL)
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Rating:54Neutral
Price Target:
$13.50
▼(-5.00% Downside)
RealReal's overall stock score is primarily impacted by its financial challenges, including high leverage and negative equity, which pose significant risks. However, the positive earnings call, indicating strong GMV and revenue growth, and the bullish technical indicators provide some optimism. The valuation remains a concern due to ongoing losses and lack of dividend yield.
Positive Factors
Revenue Growth
The significant growth in GMV and revenue indicates strong market demand and effective sales strategies, supporting long-term expansion.
Operational Efficiency
AI-driven efficiencies enhance operational processes, reducing costs and improving margins, which can lead to sustainable profitability.
Active Buyer Growth
Growth in active buyers reflects increasing customer engagement and loyalty, which is crucial for sustaining revenue growth in the luxury resale market.
Negative Factors
High Leverage
High leverage and negative equity pose risks to financial stability, potentially limiting the company's ability to invest in growth opportunities.
Cash Flow Challenges
Weak cash generation can hinder operational flexibility and investment capacity, affecting long-term financial health and growth potential.
Competitive Pressures
Increasing competition may pressure pricing and supply acquisition, challenging RealReal's market position and profitability in the long term.
RealReal (REAL) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$1.64B
Dividend YieldN/A
Average Volume (3M)3.99M
Price to Earnings (P/E)―
Beta (1Y)2.14
Revenue Growth14.30%
EPS Growth23.73%
CountryUS
Employees3,011
SectorConsumer Cyclical
Sector Strength84
IndustryLuxury Goods
Share Statistics
EPS (TTM)-0.04
Shares Outstanding116,682,846
10 Day Avg. Volume2,181,504
30 Day Avg. Volume3,987,707
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 Cap0.98
Enterprise Value/Revenue2.42
Enterprise Value/Gross Profit3.24
Enterprise Value/Ebitda-471.75
Forecast
1Y Price Target
$15.13Price Target Upside6.47% Upside
Rating ConsensusStrong Buy
Number of Analyst Covering8
EPS Forecast (FY)-0.18
Revenue Forecast (FY)$689.39M
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 MoneyRealReal generates revenue through several key streams: consignment sales, where the company takes a commission on items sold on its platform; direct sales of luxury goods that it purchases outright; and subscription services related to its luxury consignment offerings. The company typically charges sellers a commission fee, which can vary based on the item's selling price and the seller's membership tier. Additionally, partnerships with luxury brands and designers enhance its inventory and credibility, while targeted marketing efforts drive customer engagement and sales. The growing trend of sustainable fashion and the increasing acceptance of pre-owned luxury items also contribute to its revenue growth.
RealReal Earnings Call Summary
Earnings Call Date:Nov 10, 2025
(Q3-2025)
| % Change Since: |
Next Earnings Date:Mar 03, 2026
Earnings Call Sentiment Positive
The RealReal's earnings call highlights strong financial performance with record GMV and revenue growth, significant improvements in adjusted EBITDA and free cash flow, and successful implementation of AI-driven efficiencies. Despite a decline in the take rate and competitive pressures, the company's positive outlook and raised guidance reflect confidence in sustained growth and profitability.Q3-2025 Updates
Positive Updates
Record Quarterly GMV and Revenue Growth
The RealReal achieved a record quarterly GMV of $520 million, up 20% year-over-year, and a revenue increase of 17% year-over-year to $174 million.
Strong Adjusted EBITDA and Free Cash Flow
Adjusted EBITDA reached $9.3 million, representing 5.4% of total revenue, with a year-over-year margin expansion of 380 basis points. Free cash flow for the quarter was $14 million.
Increase in Active Buyers and Consignors
The active buyer base increased 7% year-over-year, reaching over 1 million active buyers. New and repeat consignors grew in double digits year-over-year.
Successful Implementation of AI and Efficiency Initiatives
The Athena AI-enabled product intake process touched 27% of all items, aiming for 30%-40% by year-end, contributing to operational efficiencies.
Positive Outlook and Guidance Raise
The company raised its full-year GMV outlook to $2.10 billion to $2.11 billion and adjusted EBITDA to $37.7 million to $38.7 million, reflecting 400 basis points of improvement versus 2024.
Negative Updates
Decline in Take Rate
The take rate declined 70 basis points year-over-year to 37.9%, impacted by a mix into higher-value items and categories.
Uncertainty in Competitive Landscape
The competitive dynamics in the luxury resale market are evolving with new entrants, affecting pricing and supply acquisition.
Company Guidance
During the Q3 2025 earnings call for The RealReal, the company provided positive guidance, projecting an annual GMV of over $2 billion, reflecting a strong 20% year-over-year growth in Q3 GMV to $520 million. The company highlighted adjusted EBITDA of $9.3 million, representing 5.4% of total revenue, an improvement of 380 basis points from the previous year. The strategic pillars driving these results include a growth playbook, operational efficiency, and a focus on exceptional service, with the sales team achieving a 12% increase in supply value per luxury manager and sales team tenure reaching an all-time high. Additionally, the company is seeing success in fine jewelry, wedding dress searches, and increased active buyers, with the latter reaching an all-time high of over 1 million. Looking ahead to Q4, The RealReal expects GMV growth between 17% and 16% revenue growth year-over-year, with an adjusted EBITDA margin of 9.5%. The company plans to continue leveraging AI and automation to improve operational efficiencies and anticipates full-year GMV between $2.10 billion and $2.11 billion, with revenue projected in the range of $687 million to $690 million.RealReal Financial Statement Overview
Summary
RealReal faces significant financial challenges, with profitability and cash flow issues despite a strong gross profit margin. The high leverage and negative equity position pose risks to financial stability. While there is some revenue growth, operational inefficiencies and cash flow constraints need to be addressed for improved financial health.Income Statement
The company shows a strong gross profit margin of 74.65% TTM, indicating efficient cost management. However, the net profit margin remains negative at -5.55% TTM, reflecting ongoing profitability challenges. Revenue growth is modest at 4.05% TTM, suggesting slow market expansion. The EBIT and EBITDA margins are also negative, indicating operational inefficiencies.45
Neutral
Balance Sheet
The balance sheet reveals a concerning debt-to-equity ratio of -1.40 TTM, indicating high leverage and negative equity. The return on equity is positive at 19.49% TTM, but this is due to negative equity, which distorts the metric. The equity ratio is negative, highlighting financial instability and potential solvency issues.30
Negative
Cash Flow
The cash flow statement shows a significant decline in free cash flow growth at -64.01% TTM, indicating cash generation issues. The operating cash flow to net income ratio is low at 0.03 TTM, suggesting weak cash conversion. The free cash flow to net income ratio is negative, further highlighting cash flow challenges.35
Negative
| Breakdown | TTM | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|---|---|
Income Statement | ||||||
| Total Revenue | 662.79M | 600.48M | 549.30M | 603.49M | 467.69M | 299.95M |
| Gross Profit | 493.68M | 447.52M | 376.28M | 348.69M | 273.48M | 187.57M |
| EBITDA | -3.39M | -79.44M | -125.79M | -158.13M | -171.55M | -135.56M |
| Net Income | -71.47M | -134.20M | -168.47M | -196.44M | -236.11M | -175.83M |
Balance Sheet | ||||||
| Total Assets | 366.21M | 423.10M | 446.92M | 615.64M | 754.94M | 605.11M |
| Cash, Cash Equivalents and Short-Term Investments | 108.42M | 172.21M | 175.71M | 293.79M | 418.17M | 354.86M |
| Total Debt | 468.23M | 546.55M | 577.37M | 595.74M | 509.79M | 279.27M |
| Total Liabilities | 751.26M | 830.47M | 750.22M | 785.73M | 681.82M | 413.82M |
| Stockholders Equity | -385.05M | -407.38M | -303.30M | -170.09M | 73.13M | 191.29M |
Cash Flow | ||||||
| Free Cash Flow | -19.21M | -4.50M | -90.44M | -114.42M | -189.59M | -161.35M |
| Operating Cash Flow | 10.48M | 21.55M | -61.27M | -91.56M | -142.15M | -134.42M |
| Investing Cash Flow | -31.13M | -25.59M | -42.13M | -36.92M | -43.44M | 178.00M |
| Financing Cash Flow | -24.15M | 539.00K | 226.00K | 4.10M | 252.91M | 152.81M |
RealReal Technical Analysis
Positive
14.21
Price Trends
12.33
Positive
10.10
Positive
7.85
Positive
Market Momentum
0.54
Positive
59.21
Neutral
40.58
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 14.21 is above the 20-day moving average (MA) of 14.09, above the 50-day MA of 12.33, and above the 200-day MA of 7.85, indicating a bullish trend. The MACD of 0.54 indicates Positive momentum. The RSI at 59.21 is Neutral, neither overbought nor oversold. The STOCH value of 40.58 is Neutral, 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 |
|---|---|---|---|---|---|---|---|
68 Neutral | $342.72M | 31.86 | 18.19% | ― | 23.75% | 59.66% | |
67 Neutral | $1.32B | 2.16 | 56.42% | ― | 97.28% | ― | |
61 Neutral | $18.38B | 12.79 | -2.54% | 3.03% | 1.52% | -15.83% | |
56 Neutral | $3.13B | ― | -165.96% | ― | -17.66% | -223.06% | |
54 Neutral | $1.64B | ― | ― | ― | 14.30% | 23.73% | |
51 Neutral | $126.01M | ― | -2.88% | 13.51% | 1.32% | -175.81% | |
42 Neutral | $236.23M | ― | -2353.49% | ― | -23.54% | -49.41% |
* Consumer Cyclical Sector Average
REAL
RealReal
14.21
5.15
56.84%
CPRI
Capri Holdings
25.93
3.74
16.85%
ELA
Envela
12.50
5.64
82.22%
LUXE
LuxExperience
9.80
2.60
36.11%
LANV
Lanvin Group Holdings
2.14
0.30
16.30%
BRLT
Brilliant Earth Group
1.85
0.07
3.93%
RealReal Corporate Events
Executive/Board Changes
RealReal Board Member Gilbert Baird Resigns
Neutral
Nov 18, 2025
On November 17, 2025, Gilbert L. (Chip) Baird III resigned from the Board of Directors of The RealReal, Inc., a company involved in the resale of luxury goods. Mr. Baird, a co-founder and managing partner of GreyLion Partners LP, which was a pre-IPO investor in the company, sold his shareholding on the same date. He will continue consulting for the company until June 30, 2026. Following his resignation, the board size was reduced to seven directors.
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.