Rent the Runway (RENT) AI Stock Analysis

• Market Cap: $20.67M
• Dividend Yield: N/A
• Average Volume (3M): 160.41K
• Price to Earnings (P/E): ―
• Beta (1Y): 2.27
• Revenue Growth: 0.60%
• EPS Growth: 36.38%
• Country: US
• Employees: 912
• Sector: Consumer Cyclical
• Sector Strength: 61
• Industry: Apparel - Retail
• EPS (TTM): -6.15
• Shares Outstanding: 3,866,254
• 10 Day Avg. Volume: 92,401
• 30 Day Avg. Volume: 160,408
• PEG Ratio: 0.00
• Price to Book (P/B): -3.46
• Price to Sales (P/S): 0.00
• P/FCF Ratio: -6.34
• Enterprise Value/Market Cap: 72.19
• Enterprise Value/Revenue: 1.23
• Enterprise Value/Gross Profit: 6.84
• Enterprise Value/Ebitda: 5.87
• 1Y Price Target: $21.00
• Price Target Upside: 319.16% Upside
• Rating Consensus: Hold
• Number of Analyst Covering: 1

• Rating: 44 Neutral
• Price Target: $4.50 ▼(-10.18%Downside)

The overall stock score is significantly impacted by poor financial performance, characterized by negative profitability and financial instability. Despite some positive signals from subscriber growth and strategic board changes, the negative valuation metrics and bearish technical indicators weigh heavily on the stock's outlook.

Positive Factors

Revenue Performance

Rent the Runway reported 2Q24 revenue and EBITDA above the high end of guidance while reiterating guidance for breakeven free cash flow for 2024.

Subscriber Growth

Reserve and resale both grew 20%+, indicating positive trends for new subscriber growth.

Negative Factors

Market Potential

The lack of subscriber growth suggests a smaller total addressable market than initially believed at the IPO.

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-based model and individual rental services. The company offers multiple subscription tiers, allowing members to rent a set number of items per month for a recurring fee. Additionally, customers can choose to rent items for a short-term period without a subscription, providing flexibility in usage. Rent the Runway also monetizes through the direct sale of pre-worn items from its inventory, catering to consumers interested in owning designer pieces at a reduced price. Strategic partnerships with designers and fashion brands enable Rent the Runway to maintain a diverse and appealing selection, further driving customer engagement and retention.

Rent the Runway Financial Statement Overview

Summary

Rent the Runway is grappling with profitability issues, reflected in a negative net profit margin and EBIT margin. The balance sheet is highly leveraged, with negative stockholders' equity and financial instability. Cash flow challenges persist despite some improvement in operating cash flow.

Income Statement

The company shows a strong gross profit margin of 72.56% TTM, but net profit margin remains negative at -24.61% TTM, indicating profitability challenges. Revenue growth is relatively flat with a 1.48% increase over the last two years. The negative EBIT margin of -16.92% TTM reflects operational inefficiencies.

Balance Sheet

The balance sheet shows significant financial leverage with a negative stockholders' equity of -$207.1 million TTM and a high debt-to-equity ratio due to negative equity, signifying financial instability. The equity ratio is also negative, indicating potential solvency issues.

Cash Flow

The company has improved operating cash flow with a positive operating cash flow to net income ratio of 0.22 TTM. However, free cash flow remains negative, and the free cash flow to net income ratio is also negative, highlighting cash generation challenges.

Breakdown	TTM	Mar 2025	Mar 2024	Mar 2023	Mar 2022	Mar 2021
Income Statement
Total Revenue	300.80M	306.20M	298.20M	296.40M	203.30M	157.50M
Gross Profit	218.20M	223.40M	119.70M	204.20M	69.70M	-23.50M
EBITDA	70.00M	72.70M	25.70M	-4.70M	-67.20M	-52.20M
Net Income	-74.00M	-69.90M	-113.20M	-138.70M	-211.80M	-171.10M
Balance Sheet
Total Assets	245.30M	240.00M	278.50M	336.20M	447.50M	320.70M
Cash, Cash Equivalents and Short-Term Investments	70.40M	77.40M	84.00M	154.50M	247.60M	95.30M
Total Debt	386.00M	380.80M	356.60M	315.20M	312.80M	414.20M
Total Liabilities	452.40M	422.50M	400.80M	371.50M	376.40M	847.40M
Stockholders Equity	-207.10M	-182.50M	-122.30M	-35.30M	71.10M	-526.70M
Cash Flow
Free Cash Flow	-43.60M	-40.70M	-98.20M	-118.70M	-83.40M	-121.50M
Operating Cash Flow	16.60M	12.90M	-15.70M	-47.70M	-42.30M	-42.80M
Investing Cash Flow	-28.80M	-20.10M	-54.60M	-44.30M	-22.50M	-58.40M
Financing Cash Flow	-400.00K	-300.00K	700.00K	-4.00M	215.20M	168.50M

Rent the Runway Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 5.01
• 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 5.01 is below the 20-day moving average (MA) of 5.47, below the 50-day MA of 5.38, and below the 200-day MA of 7.29, indicating a bearish trend. The MACD of -0.20 indicates Positive momentum. The RSI at 45.91 is Neutral, neither overbought nor oversold. The STOCH value of 63.18 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
Sector *	64 Neutral	£1.70B	12.12	6.12%	3.08%	0.58%	-32.48%
ZUMZ	52 Neutral	$251.99M	1,289.09	0.23%	―	3.01%	―
SFIX	51 Neutral	$520.64M	―	-27.37%	―	-8.48%	55.77%
RENT	44 Neutral	$20.67M	―	47.49%	―	0.60%	36.38%
TLYS	44 Neutral	$44.93M	―	-47.54%	―	-8.79%	-15.17%
CURV	44 Neutral	$293.15M	29.56		―	-4.21%	-16.35%
LVLU	42 Neutral	$11.29M	―	-179.00%	―	-11.33%	-183.48%

Rent the Runway Corporate Events

Rent the Runway Elects Daniel Rosensweig to Board

On May 12, 2025, Rent the Runway, Inc. announced the election of Daniel Rosensweig as a Class I director, increasing the Board’s size from seven to eight members. Rosensweig, who previously served on the Board from 2012 to 2023, was also appointed to the Finance Committee. His return is expected to strengthen the company’s governance and financial oversight, potentially impacting its strategic direction and stakeholder confidence.

The most recent analyst rating on (RENT) stock is a Buy with a $34.00 price target. To see the full list of analyst forecasts on Rent the Runway stock, see the RENT Stock Forecast page.