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Realreal (REAL)
:REAL
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RealReal
(NASDAQ:REAL)
Select Model
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Rating:56Neutral
Price Target:
$16.00
▲(17.13% Upside)
The overall stock score of 56 reflects significant financial challenges, including negative equity and cash flow issues, which weigh heavily on the score. However, strong technical indicators and positive earnings call sentiment provide some optimism. The valuation remains unattractive due to ongoing losses, but the company's strategic initiatives and positive guidance offer potential for future improvement.
Positive Factors
Revenue Growth
The RealReal's strong revenue and GMV growth indicates robust demand and successful market penetration, supporting long-term business expansion.
AI and Operational Efficiency
AI-driven efficiencies enhance operational capabilities, reduce costs, and improve scalability, providing a competitive edge in the luxury resale market.
Positive Guidance
Raised guidance reflects management's confidence in sustained growth and profitability, signaling strong future performance potential.
Negative Factors
Negative Profit Margins
Persistent negative profit margins highlight ongoing operational challenges, potentially impacting long-term financial health and investor confidence.
High Financial Leverage
High leverage poses financial risks, limiting flexibility and increasing vulnerability to economic downturns, affecting long-term stability.
Cash Flow Issues
Negative cash flow growth indicates difficulties in sustaining operations and funding growth initiatives, potentially hindering long-term viability.
RealReal (REAL) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$1.65B
Dividend YieldN/A
Average Volume (3M)4.20M
Price to Earnings (P/E)―
Beta (1Y)2.16
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. Volume6,303,885
30 Day Avg. Volume4,204,770
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 Cap0.97
Enterprise Value/Revenue2.42
Enterprise Value/Gross Profit3.24
Enterprise Value/Ebitda-471.75
Forecast
1Y Price Target
$15.13Price Target Upside10.76% Upside
Rating ConsensusStrong Buy
Number of Analyst Covering8
EPS Forecast (FY)-0.18
Revenue Forecast (FY)$675.03M
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
13.66
Price Trends
11.27
Positive
8.89
Positive
7.43
Positive
Market Momentum
0.86
Negative
59.20
Neutral
59.25
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 13.66 is above the 20-day moving average (MA) of 12.57, above the 50-day MA of 11.27, and above the 200-day MA of 7.43, indicating a bullish trend. The MACD of 0.86 indicates Negative momentum. The RSI at 59.20 is Neutral, neither overbought nor oversold. The STOCH value of 59.25 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 |
|---|---|---|---|---|---|---|---|
69 Neutral | $1.25B | 1.81 | 60.72% | ― | 51.76% | ― | |
65 Neutral | $263.79M | 26.44 | 18.19% | ― | 23.75% | 59.66% | |
61 Neutral | $18.38B | 12.79 | -2.54% | 3.03% | 1.52% | -15.83% | |
56 Neutral | $1.65B | ― | ― | ― | 14.30% | 23.73% | |
51 Neutral | $136.94M | ― | -2.88% | 13.02% | 1.32% | -175.81% | |
46 Neutral | $2.59B | ― | -165.96% | ― | -17.66% | -223.06% | |
41 Neutral | $237.40M | ― | -2353.49% | ― | -23.54% | -49.41% |
* Consumer Cyclical Sector Average
REAL
RealReal
13.66
9.23
208.35%
CPRI
Capri Holdings
21.85
1.81
9.03%
ELA
Envela
10.38
3.88
59.69%
LUXE
LuxExperience
9.15
1.92
26.56%
LANV
Lanvin Group Holdings
2.10
0.51
32.08%
BRLT
Brilliant Earth Group
1.92
0.49
34.27%
RealReal Corporate Events
The RealReal’s Earnings Call: Record Growth and Positive Outlook
Nov 12, 2025
The RealReal’s recent earnings call painted a picture of robust financial health and strategic advancements. The company reported record growth in GMV and revenue, alongside significant improvements in adjusted EBITDA and free cash flow. Despite facing a decline in take rate and competitive pressures, the overall sentiment was positive, with the company expressing confidence in its ability to sustain growth and profitability, as reflected in its raised guidance.
The RealReal Reports Record Growth in Q3 2025
Nov 11, 2025
The RealReal, Inc. is the world’s largest online marketplace for authenticated, resale luxury goods, providing a platform for buying and selling luxury items with a focus on sustainability and the circular economy.
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.
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.