Rent the Runway (RENT) AI Stock Analysis

• Market Cap: $28.45M
• Dividend Yield: N/A
• Average Volume (3M): 81.24K
• Price to Earnings (P/E): ―
• Beta (1Y): 2.19
• Revenue Growth: 0.20%
• EPS Growth: 18.30%
• Country: US
• Employees: 912
• Sector: Consumer Cyclical
• Sector Strength: 84
• Industry: Apparel - Retail
• EPS (TTM): -5.57
• Shares Outstanding: 6,912,187
• 10 Day Avg. Volume: 105,286
• 30 Day Avg. Volume: 81,242
• 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: 12.62
• Enterprise Value/Revenue: 1.19
• Enterprise Value/Gross Profit: 1.64
• Enterprise Value/Ebitda: 5.31
• 1Y Price Target: N/A
• Price Target Upside: N/A
• Rating Consensus: N/A
• Number of Analyst Covering: 0
• EPS Forecast (FY): N/A
• Revenue Forecast (FY): N/A

• Rating: 41 Neutral
• Price Target: $4.50 ▲(3.93% Upside)

Rent the Runway's overall stock score is primarily impacted by its weak financial performance and unfavorable valuation metrics. The company's significant revenue growth is overshadowed by profitability challenges, high leverage, and cash flow issues. Technical analysis indicates a lack of positive momentum, further contributing to the low score.

Positive Factors

Subscriber Growth

Record subscriber growth indicates strong demand and customer loyalty, which can drive sustained revenue and market presence over the long term.

Inventory Expansion

Significant inventory expansion enhances product variety and customer satisfaction, supporting retention and attracting new subscribers.

Innovative Product Features

Innovative product features improve user experience and reduce churn, contributing to long-term customer retention and competitive advantage.

Negative Factors

Negative Free Cash Flow

Negative free cash flow indicates cash management challenges, which can constrain growth initiatives and financial flexibility over time.

High Leverage

High leverage and negative equity pose risks to financial stability, potentially impacting the company's ability to invest in growth and manage economic downturns.

Decline in Total Revenue

A decline in total revenue reflects challenges in maintaining sales momentum, which could hinder profitability and long-term growth prospects if not addressed.

Rent the Runway Business Overview & Revenue Model

Company Description

Rent the Runway (RENT) is a leading online clothing rental service that allows customers to rent high-end designer apparel and accessories for a fraction of the retail price. Founded in 2009, the company operates in the fashion technology sector and offers a variety of products including dresses, tops, bottoms, and handbags for special occasions, everyday wear, and work attire. With a subscription model and a pay-per-rental option, Rent the Runway aims to provide a more sustainable and accessible approach to fashion for women.

How the Company Makes Money

Rent the Runway generates revenue through multiple streams, primarily its subscription service and individual rental transactions. The subscription model allows customers to pay a monthly fee to access a rotating selection of designer items, which encourages repeat business and customer loyalty. Additionally, the company earns revenue from one-time rental transactions where customers can rent items without committing to a subscription. Rent the Runway also benefits from partnerships with designers and brands, which not only increases its inventory but also helps in marketing and brand visibility. Furthermore, the company may generate income through its retail sales of used items and exclusive collections, as well as through potential collaborations with fashion influencers and events that increase brand exposure.

Rent the Runway Financial Statement Overview

Summary

Rent the Runway's financial performance is concerning. Despite strong revenue growth, the company faces significant profitability challenges with negative net profit and EBIT margins. The balance sheet is weak, with negative equity and high leverage, posing financial stability risks. Cash flow issues further highlight operational inefficiencies.

Income Statement

Rent the Runway's income statement reveals significant challenges. The company has experienced a substantial revenue growth rate of 66.5% in the TTM, indicating strong top-line growth. However, profitability remains a concern with a negative net profit margin of -24.6% and an EBIT margin of -16.9%. The gross profit margin is relatively healthy at 72.5%, but the consistent net losses highlight ongoing operational inefficiencies.

Balance Sheet

The balance sheet shows a precarious financial position. The company has a negative stockholders' equity, leading to a concerning debt-to-equity ratio of -1.86 in the TTM. This high leverage poses a risk to financial stability. The return on equity is positive at 42.8%, but this is due to the negative equity base rather than operational success. The equity ratio is negative, indicating that liabilities exceed assets.

Cash Flow

Cash flow analysis indicates ongoing cash management issues. The free cash flow is negative, and the free cash flow growth rate is -46.56% in the TTM, reflecting deteriorating cash generation. The operating cash flow to net income ratio is 0.23, suggesting limited cash conversion efficiency. The negative free cash flow to net income ratio of -2.63 further underscores cash flow challenges.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	302.80M	306.20M	298.20M	296.40M	203.30M	157.50M
Gross Profit	218.30M	223.40M	119.70M	204.20M	69.70M	-23.50M
EBITDA	67.60M	76.80M	25.70M	-4.70M	-67.20M	-58.20M
Net Income	-84.80M	-69.90M	-113.20M	-138.70M	-211.80M	-171.10M
Balance Sheet
Total Assets	219.00M	240.00M	278.50M	336.20M	447.50M	320.70M
Cash, Cash Equivalents and Short-Term Investments	43.60M	77.40M	84.00M	154.50M	247.60M	95.30M
Total Debt	43.50M	380.80M	356.60M	315.20M	312.80M	414.20M
Total Liabilities	451.10M	422.50M	400.80M	371.50M	376.40M	847.40M
Stockholders Equity	-232.10M	-182.50M	-122.30M	-35.30M	71.10M	-526.70M
Cash Flow
Free Cash Flow	-23.30M	-40.70M	-98.20M	-118.70M	-83.40M	-121.50M
Operating Cash Flow	3.90M	12.90M	-15.70M	-47.70M	-42.30M	-42.80M
Investing Cash Flow	-38.10M	-20.10M	-54.60M	-44.30M	-22.50M	-58.40M
Financing Cash Flow	-200.00K	-300.00K	700.00K	-4.00M	215.20M	168.50M

Rent the Runway Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 4.33
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Negative
• MACD: Positive
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For RENT, the sentiment is Negative. The current price of 4.33 is above the 20-day moving average (MA) of 4.30, below the 50-day MA of 4.64, and below the 200-day MA of 4.77, indicating a bearish trend. The MACD of -0.20 indicates Positive momentum. The RSI at 44.19 is Neutral, neither overbought nor oversold. The STOCH value of 28.45 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for RENT.

Rent the Runway Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
VSCO	69 Neutral	$2.81B	19.58	26.29%	―	2.30%	8.85%
Sector *	61 Neutral	$18.38B	12.79	-2.54%	3.03%	1.52%	-15.83%
SFIX	55 Neutral	$564.61M	―	-14.79%	―	-5.26%	79.25%
LVLU	47 Neutral	$12.37M	-0.25	-187.85%	―	-10.68%	-74.47%
CURV	42 Neutral	$119.00M	36.86	―	―	-5.76%	-75.71%
TLYS	41 Neutral	$42.97M	―	-43.51%	―	-11.10%	-10.31%
RENT	41 Neutral	$28.45M	―	―	―	0.20%	18.30%

Rent the Runway Corporate Events

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.

The most recent analyst rating on (RENT) stock is a Hold with a $4.50 price target. To see the full list of analyst forecasts on Rent the Runway stock, see the RENT Stock Forecast page.

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.

The most recent analyst rating on (RENT) stock is a Hold with a $5.00 price target. To see the full list of analyst forecasts on Rent the Runway stock, see the RENT Stock Forecast page.

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.

The most recent analyst rating on (RENT) stock is a Hold with a $5.00 price target. To see the full list of analyst forecasts on Rent the Runway stock, see the RENT Stock Forecast page.

Rent the Runway Reports Q2 2025 Financial Results

Rent the Runway, Inc., a pioneer in the fashion rental industry, offers women the opportunity to rent, subscribe, and shop for designer apparel through its innovative ‘Closet in the Cloud’ platform. In its latest earnings report, Rent the Runway announced a transformative recapitalization plan aimed at reducing debt and injecting capital into the business, alongside a notable increase in active subscribers and customer satisfaction. The company reported a 13.4% year-over-year increase in active subscribers and a significant improvement in customer engagement metrics, despite a net loss of $26.4 million for the quarter. Key highlights include a strategic recapitalization plan to reduce debt from $340 million to $120 million, an expanded inventory strategy, and increased customer engagement with new inventory. The company also launched new brand collaborations and adjusted subscription prices to address inflationary pressures. Looking ahead, Rent the Runway anticipates continued growth in active subscribers and aims to strengthen its financial position through strategic initiatives, despite potential economic uncertainties.

Rent the Runway Announces Recapitalization Agreement

On August 20, 2025, Rent the Runway entered into a recapitalization agreement aimed at enhancing its financial position by reducing debt, lowering interest expenses, and extending debt maturity. The transaction involves converting a significant portion of existing debt into common equity and receiving new capital contributions from partners APS, STORY3, and Nexus, which are expected to support the company’s growth initiatives. The recapitalization is anticipated to close by December 31, 2025, subject to stockholder approval, and aims to provide Rent the Runway with the financial flexibility needed to capitalize on the expanding rental market in the U.S.

The most recent analyst rating on (RENT) stock is a Hold with a $4.50 price target. To see the full list of analyst forecasts on Rent the Runway stock, see the RENT Stock Forecast page.