Rent the Runway (RENT) AI Stock Analysis

• Market Cap: $192.00M
• Dividend Yield: N/A
• Average Volume (3M): 73.24K
• Price to Earnings (P/E): ―
• Beta (1Y): 1.98
• 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: 36,401
• 30 Day Avg. Volume: 73,244
• 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: 0.92
• Enterprise Value/Revenue: 0.56
• Enterprise Value/Gross Profit: 3.42
• Enterprise Value/Ebitda: 1.01
• 1Y Price Target: N/A
• Price Target Upside: N/A
• Rating Consensus: N/A
• Number of Analyst Covering: 0
• EPS Forecast (FY): -19.64
• Revenue Forecast (FY): $302.60M

• Rating: 45 Neutral
• Price Target: $5.50 ▲(11.34% Upside)
• Action: Reiterated Date: 02/04/26
• Date: Action: Reiterated 02/04/26

The score is held down mainly by weak financial health (negative equity/high leverage indicators, negative EBIT margin, and declining free cash flow) and bearish technicals (below key moving averages with negative MACD). These are partly offset by a more constructive earnings outlook (subscriber/revenue growth and improved guidance) and a liquidity-positive financing update.

Positive Factors

High gross margin

A 72.3% TTM gross margin signals durable unit economics and operational efficiency in core rental operations. High gross margins provide a structural buffer to cover fulfillment and styling costs, supporting scalability and margin recovery as customer mix and volumes improve over months.

Subscriber and revenue momentum

Consistent subscriber growth and multi-quarter revenue acceleration underpin a recurring-revenue business model. Rising active subscribers improve lifetime value and utilization of inventory, enabling better fixed-cost absorption and more predictable revenue over the medium term.

Debt reduction & extended maturity

Substantial deleveraging and extended debt maturity materially reduce refinancing risk and interest burden. This structural recapitalization increases financial flexibility to invest in inventory, customer experience and growth initiatives without immediate liquidity pressure.

Negative Factors

Weak balance sheet / negative equity

Negative equity and high leverage reflect structural capital weakness that limits strategic optionality. Persistent negative equity constrains ability to raise unsecured capital, increases cost of financing, and leaves the company vulnerable to shocks or slower-than-expected revenue persistence.

Operating profitability deficits

Sustained negative EBIT margins indicate the business still fails to cover operating costs from core operations. Until fixed and variable cost structure improves or scale benefits materialize, profitability deficits will pressure retained earnings and reinvestment capacity over the medium term.

Deteriorating free cash flow

Sharply declining FCF growth and negative operating cash conversion point to structural working capital and capex demands, especially inventory financing. Persistent negative FCF reduces internal funding for marketing and product improvement, increasing reliance on external financing.

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

Strong gross margin (72.31% TTM) and modest revenue growth (3.86% TTM) are outweighed by weak profitability (EBIT margin -14.88% TTM), negative equity/high leverage signals, and deteriorating free cash flow growth (-38.20% TTM).

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	Jan 2025	Jan 2024	Jan 2023	Jan 2022	Jan 2021
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: Negative
• Last Price: 4.94
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Positive
• 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 4.94 is below the 20-day moving average (MA) of 6.32, below the 50-day MA of 7.42, and below the 200-day MA of 5.46, indicating a neutral trend. The MACD of -0.32 indicates Positive momentum. The RSI at 35.21 is Neutral, neither overbought nor oversold. The STOCH value of 24.62 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	72 Outperform	$4.91B	30.00	31.50%	―	2.97%	9.85%
Sector *	61 Neutral	$18.38B	12.79	-2.54%	3.03%	1.52%	-15.83%
LVLU	55 Neutral	$43.32M	-0.96	-195.23%	―	-12.10%	-44.14%
SFIX	49 Neutral	$434.80M	-14.67	-14.67%	―	-0.08%	73.05%
TLYS	48 Neutral	$42.05M	-1.22	-34.77%	―	-8.31%	36.10%
RENT	45 Neutral	$192.00M	-4.75	―	―	2.91%	94.12%
CURV	45 Neutral	$102.17M	-46.40	―	―	-7.33%	-114.80%

Rent the Runway Corporate Events

Rent the Runway Amends Credit Agreement, Easing Liquidity Terms

On January 28, 2026, Rent the Runway, Inc. entered into a First Amendment to its Amended and Restated Credit Agreement with its lenders and administrative agent, CHS (US) Management LLC, originally dated October 28, 2025, to remove the minimum liquidity covenant from the facility. This change eases a key financial constraint on the company, potentially providing greater flexibility in managing its cash position and capital needs, which may affect how it navigates its financing strategy and short-term liquidity management.

The most recent analyst rating on (RENT) stock is a Hold with a $7.00 price target. To see the full list of analyst forecasts on Rent the Runway stock, see the RENT Stock Forecast page.