Rent the Runway (RENT) AI Stock Analysis

• Market Cap: $24.83M
• Dividend Yield: N/A
• Average Volume (3M): 121.02K
• Price to Earnings (P/E): ―
• Beta (1Y): 2.22
• Revenue Growth: 0.60%
• EPS Growth: 36.38%
• Country: US
• Employees: 912
• Sector: Consumer Cyclical
• Sector Strength: 81
• Industry: Apparel - Retail
• EPS (TTM): -6.15
• Shares Outstanding: 3,941,332
• 10 Day Avg. Volume: 56,291
• 30 Day Avg. Volume: 121,023
• PEG Ratio: N/A
• Price to Book (P/B): N/A
• Price to Sales (P/S): N/A
• P/FCF Ratio: N/A
• Enterprise Value/Market Cap: 13.22
• Enterprise Value/Revenue: 1.09
• Enterprise Value/Gross Profit: 1.50
• Enterprise Value/Ebitda: 4.69
• 1Y Price Target: $5.50
• Price Target Upside: -13.79% Downside
• Rating Consensus: Hold
• Number of Analyst Covering: 0

• Rating: 48 Neutral
• Price Target: $5.50 ▼(-13.79% Downside)

Rent the Runway's overall stock score is primarily impacted by its poor financial performance, characterized by high leverage and negative cash flow. While technical analysis and valuation also reflect challenges, the company's strategic initiatives in subscriber growth and a recent recapitalization agreement offer some optimism for future improvement.

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 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 faces significant financial challenges with negative net income, a highly leveraged balance sheet, and weak cash flow performance. Despite a strong gross profit margin, the company's financial health is concerning due to high debt and negative equity.

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	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
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: Positive
• Last Price: 6.38
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Negative
• RSI: Neutral
• STOCH: Negative

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 6.38 is above the 20-day moving average (MA) of 5.26, above the 50-day MA of 5.07, and above the 200-day MA of 6.26, indicating a bullish trend. The MACD of 0.32 indicates Negative momentum. The RSI at 69.49 is Neutral, neither overbought nor oversold. The STOCH value of 92.14 is Negative, 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
ZUMZ	64 Neutral	$365.54M	1,677.27	0.19%	―	1.64%	―
Sector *	61 Neutral	$17.92B	12.81	-0.76%	2.98%	1.30%	-14.28%
SFIX	55 Neutral	$737.25M	―	-27.37%	―	-8.48%	55.77%
TLYS	54 Neutral	$57.90M	―	-43.51%	―	-11.10%	-10.31%
RENT	48 Neutral	$24.83M	―	47.49%	―	0.60%	36.38%
CURV	42 Neutral	$187.03M	52.88		―	-5.76%	-75.71%
LVLU	42 Neutral	$11.02M	―	-187.85%	―	-10.68%	-74.47%

Rent the Runway Corporate Events

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.

Rent the Runway Holds Annual Stockholders Meeting

On July 8, 2025, Rent the Runway, Inc. held its Annual Meeting of Stockholders, where 74.68% of the company’s voting power was represented. During the meeting, Tim Bixby, Jennifer Fleiss, and Daniel Rosensweig were elected as Class I Directors, and PricewaterhouseCoopers LLP was ratified as the independent registered public accounting firm for the fiscal year ending January 31, 2026.