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Rent the Runway
(NASDAQ:RENT)
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Rating:48Neutral
Price Target:
$3.50
▲(16.28% Upside)
Action:Reiterated
Date:07/17/26
The score is held down primarily by weak financial quality—negative equity and ongoing cash burn despite improving reported profitability. Technicals are also soft, with the stock below key longer-term moving averages and a negative MACD. Offsetting factors include a very low P/E and an earnings call that supports a recovery narrative via strong revenue growth and reiterated EBITDA guidance, while recent governance improvements provide a modest additional positive.
Positive Factors
Recurring subscription model & subscriber growth
A growing subscriber base underpins predictable, recurring revenue and higher lifetime value. Steady subscriber expansion improves garment utilization and spreads fixed fulfillment costs, strengthening unit economics and supporting durable revenue visibility over the next several quarters.
Negative Factors
Negative stockholders' equity
Negative equity constrains the company’s ability to absorb shocks and pursue strategic investments without external capital. Even with lower debt, negative net worth elevates refinancing and covenant risk, reducing optionality and raising the probability of dilutive financing if performance weakens.
Read all positive and negative factors
Positive Factors
Negative Factors
Recurring subscription model & subscriber growth
A growing subscriber base underpins predictable, recurring revenue and higher lifetime value. Steady subscriber expansion improves garment utilization and spreads fixed fulfillment costs, strengthening unit economics and supporting durable revenue visibility over the next several quarters.
Read all positive factors
Rent the Runway Key Performance Indicators (KPIs)
Any
Subscriber Breakdown
Provides a detailed look at the composition of subscribers, revealing trends in customer acquisition, retention, and the overall health of the subscription model.
Provides a detailed look at the composition of subscribers, revealing trends in customer acquisition, retention, and the overall health of the subscription model.
Data provided by:
The Fly
The FlyRent the Runway (RENT) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$122.25M
Dividend YieldN/A
Average Volume (3M)95.91K
Price to Earnings (P/E)0.5
Beta (1Y)2.60
Revenue Growth16.39%
EPS GrowthN/A
CountryUS
Employees979
SectorConsumer Cyclical
Sector Strength84
IndustryApparel - Retail
Share Statistics
EPS (TTM)6.53
Shares Outstanding33,586,430
10 Day Avg. Volume55,424
30 Day Avg. Volume95,911
Financial Highlights & Ratios
PEG Ratio-0.03
Price to Book (P/B)-2.34
Price to Sales (P/S)0.26
P/FCF Ratio-1.81
Enterprise Value/Market Cap<0.01
Enterprise Value/Revenue<0.01
Enterprise Value/Gross Profit<0.01
Enterprise Value/Ebitda<0.01
Forecast
1Y Price TargetN/A
Price Target UpsideN/A
Rating ConsensusN/A
Number of Analyst Covering0
EPS Forecast (FY)-19.64
Revenue Forecast (FY)$302.60M
Rent the Runway Business Overview & Revenue Model
Company Description
Rent the Runway, Inc. operates a service that leases premium women's fashion and apparel. Customers can access these offerings through the company's online platform and its physical retail locations. Their extensive inventory spans a broad spectru...
How the Company Makes Money
Rent the Runway primarily makes money through recurring subscription fees paid by customers for access to a rotating wardrobe of rental items. Subscribers typically pay for plans that allow a set number of items per month and can exchange items du...
Rent the Runway Earnings Call Summary
Earnings Call Date:Jun 03, 2026
(Q1-2026)
| % Change Since: |
Next Earnings Date:Sep 16, 2026
Earnings Call Sentiment Positive
The earnings call conveyed strong top-line momentum: nearly 30% revenue growth, meaningful add-on and retail strength, improving adjusted EBITDA, and promising early returns from AI-driven discovery and new revenue pilots. These positives are tempered by notable margin compression, worsening free cash flow in the quarter, a deceleration in ending subscriber growth versus prior periods, and exposure to transportation/fuel cost volatility and leadership transitions. Management reiterated full-year revenue and adjusted EBITDA guidance and outlined initiatives to improve discovery and diversify revenue, suggesting confidence in a continued recovery trajectory despite near-term operational headwinds.Positive Updates
Strong Revenue Growth and Guidance Beat
Total revenue of $89.9M in Q1'26, up 29.2% year-over-year, and above guidance ($85M-$87M). Company reiterates double-digit revenue growth guidance for fiscal year 2026.
Negative Updates
Gross Margin Contraction
Gross margin declined to 25.9% in Q1'26 from 31.5% in Q1'25 and fell from 38.6% in Q4'25, driven by higher revenue share costs from greater share-by-RTR inventory and seasonally higher fixed revenue share costs.
Read all updates
Q1-2026 Updates
Positive
Negative
Strong Revenue Growth and Guidance Beat
Total revenue of $89.9M in Q1'26, up 29.2% year-over-year, and above guidance ($85M-$87M). Company reiterates double-digit revenue growth guidance for fiscal year 2026.
Read all positive updates
Company Guidance
Management reiterated double‑digit revenue growth for fiscal 2026 and an adjusted EBITDA target of 4%–7% of revenue for the full year, with rental product acquired expected to be $45–50M; for Q2 they guided revenue of $91–95M (up 12%–17% vs Q2 ’25) and Q2 adjusted EBITDA of 5%–8% of revenue. For context, Q1 revenue was $89.9M (+29.2% YoY), beating prior guidance of $85–87M, with ending active subscribers of 155,692 (+5.8% YoY) and average active subscribers of 149,744 (+12.2% YoY). Management highlighted strong product engagement—add‑on revenue +70% YoY and +11% QoQ, a personalized carousel driving an 11% increase in hearting behavior for active subscribers, and AI imagery lifting views on updated styles by 129%. Q1 unit economics included fulfillment costs of $23.6M (26.2% of revenue), gross margin of 25.9%, operating expenses 45.4% of revenue, adjusted EBITDA of –$0.8M (–0.9% of revenue), and free cash flow of –$13.6M, with the company expecting improved free cash flow over fiscal 2026 (and an April 2026 debt amendment allowing PIK interest through April 2027).Rent the Runway Financial Statement Overview
Summary
Income Statement
44
Neutral
Balance Sheet
22
Negative
Cash Flow
28
Negative
| Breakdown | TTM | Jan 2026 | Jan 2025 | Jan 2024 | Jan 2023 | Jan 2022 |
|---|---|---|---|---|---|---|
Income Statement | ||||||
| Total Revenue | 350.10M | 329.80M | 306.20M | 298.20M | 296.40M | 203.30M |
| Gross Profit | 198.10M | 196.00M | 67.70M | 60.80M | 55.10M | 8.90M |
| EBITDA | 172.40M | 22.30M | 76.80M | 25.70M | -4.70M | -67.20M |
| Net Income | 29.80M | 22.60M | -69.90M | -113.20M | -138.70M | -211.80M |
Balance Sheet | ||||||
| Total Assets | 212.70M | 221.00M | 509.60M | 534.60M | 336.20M | 447.50M |
| Cash, Cash Equivalents and Short-Term Investments | 37.10M | 50.40M | 77.40M | 84.00M | 154.50M | 247.60M |
| Total Debt | 197.10M | 198.30M | 380.80M | 356.60M | 315.20M | 312.80M |
| Total Liabilities | 266.00M | 257.10M | 692.10M | 656.90M | 371.50M | 376.40M |
| Stockholders Equity | -53.30M | -36.10M | -182.50M | -122.30M | -35.30M | 71.10M |
Cash Flow | ||||||
| Free Cash Flow | -39.60M | -46.60M | -40.70M | -98.20M | -118.70M | -83.40M |
| Operating Cash Flow | -8.60M | 3.50M | 12.90M | -15.70M | -47.70M | -42.30M |
| Investing Cash Flow | -44.60M | -49.50M | -20.10M | -54.60M | -44.30M | -22.50M |
| Financing Cash Flow | 19.10M | 18.60M | -300.00K | 700.00K | -4.00M | 215.20M |
Rent the Runway Technical Analysis
Negative
3.01
Price Trends
3.39
Positive
4.00
Negative
5.06
Negative
Market Momentum
0.06
Negative
51.28
Neutral
34.71
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 3.01 is below the 20-day moving average (MA) of 3.46, below the 50-day MA of 3.39, and below the 200-day MA of 5.06, indicating a neutral trend. The MACD of 0.06 indicates Negative momentum. The RSI at 51.28 is Neutral, neither overbought nor oversold. The STOCH value of 34.71 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for RENT.
Rent the Runway Risk Analysis
Rent the Runway disclosed 65 risk factors in its most recent earnings report. Rent the Runway 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
Rent the Runway Peers Comparison
UnderperformOutperform
Sector (61)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
65 Neutral | $487.00M | -24.95 | -9.35% | ― | 4.66% | 68.21% | |
61 Neutral | $18.38B | 12.79 | -2.54% | 3.03% | 1.52% | -15.83% | |
58 Neutral | $44.37M | -5.53 | -407.26% | ― | -10.40% | 83.52% | |
53 Neutral | $229.89M | -17.31 | 6.03% | ― | -10.09% | -232.12% | |
49 Neutral | $122.26M | -40.30 | -3.98% | ― | 1.69% | 93.35% | |
48 Neutral | $122.25M | 0.54 | -33.43% | ― | 16.39% | ― |
* Consumer Cyclical Sector Average
RENT
Rent the Runway
3.53
-0.73
-17.14%
TLYS
Tilly's
3.99
2.41
152.53%
SFIX
Stitch Fix
3.59
-1.43
-28.49%
CURV
Torrid Holdings
2.20
-0.05
-2.22%
LVLU
Lulu's Fashion Lounge Holdings
16.27
11.90
272.31%
Rent the Runway Corporate Events
Business Operations and StrategyExecutive/Board ChangesRegulatory Filings and ComplianceShareholder Meetings
Rent the Runway Implements Shareholder-Friendly Governance Changes
Positive
Jul 17, 2026
On July 14, 2026, Rent the Runway appointed Suchi Sastri as a Class III director and member of its Audit Committee, restoring compliance with Nasdaq rules requiring three independent directors on that committee; Sastri also waived compensation for...
Business Operations and StrategyExecutive/Board Changes
Rent the Runway announces CEO transition and leadership change
Neutral
May 13, 2026
Rent the Runway announced on May 13, 2026, that co-founder Jennifer Hyman resigned as CEO, president and board member effective May 15, 2026, after nearly two decades leading the rental-focused fashion platform. She will stay on as an advisor thro...
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.