Rent the Runway (RENT) AI Stock Analysis

• Market Cap: $290.50M
• Dividend Yield: N/A
• Average Volume (3M): 246.93K
• Price to Earnings (P/E): ―
• Beta (1Y): 1.91
• Revenue Growth: 2.91%
• EPS Growth: 94.12%
• Country: US
• Employees: 912
• Sector: Consumer Cyclical
• Sector Strength: 84
• Industry: Apparel - Retail
• EPS (TTM): 13.81
• Shares Outstanding: 33,390,903
• 10 Day Avg. Volume: 451,881
• 30 Day Avg. Volume: 246,927
• PEG Ratio: <0.01
• Price to Book (P/B): -0.17
• Price to Sales (P/S): 0.10
• P/FCF Ratio: -0.75
• Enterprise Value/Market Cap: 0.05
• Enterprise Value/Revenue: 0.05
• Enterprise Value/Gross Profit: 0.28
• Enterprise Value/Ebitda: 0.08
• 1Y Price Target: N/A
• Price Target Upside: N/A
• Rating Consensus: N/A
• Number of Analyst Covering: 0
• EPS Forecast (FY): -19.58
• Revenue Forecast (FY): $294.60M

• Rating: 55 Neutral
• Price Target: $9.00 ▲(82.19% Upside)

Rent the Runway's overall stock score is primarily impacted by its financial instability, with high debt and negative cash flow being significant concerns. Despite strong technical momentum and positive earnings call developments, the stock's valuation remains unattractive due to ongoing losses. The company's ability to sustain recent operational improvements will be crucial for future performance.

Positive Factors

Debt Reduction

Significant debt reduction improves financial stability and reduces interest expenses, allowing more resources for growth initiatives.

Subscriber Growth

Strong subscriber growth indicates increasing demand and customer retention, supporting long-term revenue expansion and market presence.

Improved Customer Engagement

Enhanced customer engagement reflects improved user satisfaction and loyalty, which can drive repeat business and reduce churn.

Negative Factors

Decreased Gross Margins

Decreasing gross margins indicate rising costs, which can pressure profitability and limit the company's ability to invest in growth.

Negative Free Cash Flow

Negative free cash flow suggests cash management challenges, potentially impacting the company's ability to fund operations and growth.

High Debt Levels

High debt levels can strain financial flexibility and increase risk, potentially limiting strategic options and increasing vulnerability to downturns.

Rent the Runway Business Overview & Revenue Model

Company Description

Rent the Runway, Inc. rents designer wear for women through its stores and online retail. The company offers ready-to-wear, workwear, denim, casual, maternity, outerwear, blouses, knitwear, loungewear, jewelry, handbags, activewear, ski wear, home goods, evening wear, and kids wear, as well as accessories. It also engages in the software development and support activities. The company was incorporated in 2009 and is headquartered in Brooklyn, New York.

How the Company Makes Money

Rent the Runway generates revenue primarily through its subscription and rental services. The subscription model allows customers to pay a monthly fee for access to a rotating closet of designer fashion, which is a key revenue stream. Additionally, the company earns money through one-time rentals, where customers can rent items for specific occasions without committing to a subscription. Rent the Runway also benefits from partnerships with various fashion designers and brands, enhancing its inventory and attracting a diverse customer base. The company may also generate revenue through additional services such as clothing cleaning and insurance options, further diversifying its income streams.

Rent the Runway Financial Statement Overview

Summary

Rent the Runway faces significant financial challenges, including high debt levels, negative equity, and declining free cash flow. Despite strong gross margins, profitability remains elusive with a negative EBIT margin and low net profit margin. The balance sheet instability and cash flow issues are major concerns.

Income Statement

Rent the Runway shows a modest revenue growth rate of 3.86% TTM, indicating some positive momentum. However, profitability remains a challenge with a low net profit margin of 3.37% and negative EBIT margin of -14.88% TTM. The gross profit margin is strong at 72.31% TTM, suggesting efficient cost management. Despite improvements, the company struggles with consistent profitability.

Balance Sheet

The balance sheet reveals significant financial leverage with a negative debt-to-equity ratio of -1.21 TTM, indicating high debt levels relative to equity. The return on equity is negative, reflecting challenges in generating returns for shareholders. The equity ratio is not available due to negative equity, highlighting financial instability.

Cash Flow

Cash flow analysis shows a concerning decline in free cash flow growth at -38.20% TTM. The operating cash flow to net income ratio is negative, indicating cash flow issues. However, the free cash flow to net income ratio is high at 6.55 TTM, suggesting some ability to convert net income into free cash flow despite overall cash flow challenges.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	314.50M	306.20M	298.20M	296.40M	203.30M	157.50M
Gross Profit	51.60M	67.70M	60.80M	55.10M	8.90M	-23.50M
EBITDA	174.90M	76.80M	25.70M	-4.70M	-67.20M	-52.20M
Net Income	10.60M	-69.90M	-113.20M	-138.70M	-211.80M	-171.10M
Balance Sheet
Total Assets	231.00M	509.60M	534.60M	336.20M	447.50M	320.70M
Cash, Cash Equivalents and Short-Term Investments	50.70M	77.40M	84.00M	154.50M	247.60M	95.30M
Total Debt	202.30M	380.80M	356.60M	315.20M	312.80M	414.20M
Total Liabilities	266.10M	692.10M	656.90M	371.50M	376.40M	459.30M
Stockholders Equity	-35.10M	-182.50M	-122.30M	-35.30M	71.10M	-138.60M
Cash Flow
Free Cash Flow	-14.40M	-40.70M	-98.20M	-118.70M	-83.40M	-121.50M
Operating Cash Flow	-2.20M	12.90M	-15.70M	-47.70M	-42.30M	-42.80M
Investing Cash Flow	-42.20M	-20.10M	-54.60M	-44.30M	-22.50M	-58.40M
Financing Cash Flow	20.70M	-300.00K	700.00K	-4.00M	215.20M	168.50M

Rent the Runway Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 4.94
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Negative
• RSI: Negative
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For RENT, the sentiment is Positive. The current price of 4.94 is below the 20-day moving average (MA) of 6.72, below the 50-day MA of 5.32, and above the 200-day MA of 4.79, indicating a bullish trend. The MACD of 1.04 indicates Negative momentum. The RSI at 71.40 is Negative, neither overbought nor oversold. The STOCH value of 70.24 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for RENT.

Rent the Runway Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
VSCO	71 Outperform	$4.32B	26.39	31.50%	―	2.97%	9.85%
Sector *	61 Neutral	$18.38B	12.79	-2.54%	3.03%	1.52%	-15.83%
RENT	55 Neutral	$290.50M	-7.18	―	―	2.91%	94.12%
SFIX	54 Neutral	$696.49M	―	-14.67%	―	-0.08%	73.05%
TLYS	48 Neutral	$55.77M	-1.61	-34.77%	―	-8.31%	36.10%
LVLU	48 Neutral	$15.06M	-0.34	-195.23%	―	-12.10%	-44.14%
CURV	45 Neutral	$103.16M	-46.85	―	―	-7.33%	-114.80%

Rent the Runway Corporate Events

Rent the Runway Completes Major Recapitalization Efforts

On October 28, 2025, Rent the Runway completed significant recapitalization transactions aimed at enhancing its financial stability by reducing debt and extending debt maturity. The recapitalization involved converting debt into equity and securing additional capital, which positions the company to focus on growth and customer service. The restructuring also led to changes in the board of directors, aligning with the company’s strategic goals. The transactions are expected to support Rent the Runway’s mission to innovate in the fashion rental market and maintain its position as a leader in the industry.

Rent the Runway Shareholder Meeting Approves Key Proposals

Rent the Runway held a Special Meeting on September 23, 2025, where shareholders voted on several proposals related to the company’s stock and corporate governance. The meeting resulted in the approval of key items, including the issuance of shares of Class A Common Stock upon the Term Loan Conversion, the Rights Offering Backstop Agreement, and amendments to the 2021 Plan and the company’s Certificate of Incorporation. These approvals are significant for Rent the Runway’s compliance with Nasdaq Listing Rules and its strategic financial maneuvers.

Rent the Runway Announces $12.5 Million Rights Offering

On October 7, 2025, Rent the Runway, Inc. announced a $12.5 million rights offering. Shareholders as of October 6, 2025, received rights to purchase additional shares, potentially impacting the company’s capital structure and market positioning.

Rent the Runway Announces $12.5M Rights Offering

On September 24, 2025, Rent the Runway, Inc. announced a record date of October 6, 2025, for a $12,500,000 rights offering. This offering will allow holders of Class A and Class B common stock to purchase additional shares at a set price, potentially impacting the company’s market position and providing capital for future operations.