Rent the Runway (RENT) AI Stock Analysis

• Market Cap: $213.08M
• Dividend Yield: N/A
• Average Volume (3M): 81.43K
• Price to Earnings (P/E): ―
• Beta (1Y): 2.11
• 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: 92,478
• 30 Day Avg. Volume: 81,431
• 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: 1.68
• Enterprise Value/Revenue: 1.14
• Enterprise Value/Gross Profit: 1.58
• Enterprise Value/Ebitda: 9.86
• 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: 54 Neutral
• Price Target: $7.00 ▲(41.70% Upside)

Rent the Runway's stock score is primarily impacted by its financial instability, with high debt and negative cash flow being major concerns. However, positive technical indicators and optimistic earnings call guidance provide some upside potential.

Positive Factors

Debt Reduction

Significant debt reduction and extended maturity enhance financial stability, providing more flexibility for strategic investments and growth.

Subscriber Growth

Strong subscriber growth indicates increasing market penetration and customer retention, supporting long-term revenue expansion.

Revenue Growth

Robust revenue growth reflects successful execution of business strategies and increased demand for services, bolstering future financial performance.

Negative Factors

Negative Free Cash Flow

Persistent negative free cash flow indicates ongoing liquidity challenges, potentially limiting the company's ability to invest in growth opportunities.

Decreased Gross Margins

Declining gross margins suggest rising costs and pricing pressures, which could erode profitability if not managed effectively.

High Debt Levels

High debt levels relative to equity pose a risk to financial health, potentially constraining future borrowing capacity and investment.

Rent the Runway Business Overview & Revenue Model

Company Description

Rent the Runway (RENT) is a leading online fashion rental service that allows customers to lease designer apparel and accessories for a fraction of the retail price. Founded in 2009, the company operates primarily in the fashion and e-commerce sectors, providing a sustainable alternative to fast fashion by enabling users to rent outfits for special occasions or everyday wear. Its core offerings include a subscription model for a rotating selection of clothing and accessories, as well as one-time rental options for specific events.

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

Rent the Runway's financial performance is concerning, with significant revenue growth overshadowed by negative profitability metrics, high leverage, and cash flow challenges. The negative equity and high debt-to-equity ratio pose substantial risks to financial stability.

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	314.50M	306.20M	298.20M	296.40M	203.30M	157.50M
Gross Profit	227.40M	223.40M	119.70M	204.20M	69.70M	-23.50M
EBITDA	36.40M	76.80M	25.70M	-4.70M	-67.20M	-58.20M
Net Income	10.60M	-69.90M	-113.20M	-138.70M	-211.80M	-171.10M
Balance Sheet
Total Assets	231.00M	240.00M	278.50M	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	42.40M	380.80M	356.60M	315.20M	312.80M	414.20M
Total Liabilities	266.10M	422.50M	400.80M	371.50M	376.40M	847.40M
Stockholders Equity	-35.10M	-182.50M	-122.30M	-35.30M	71.10M	-526.70M
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: Positive
• Last Price: 4.94
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Negative
• RSI: Neutral
• STOCH: Neutral

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 4.94 is below the 20-day moving average (MA) of 5.01, above the 50-day MA of 4.68, and above the 200-day MA of 4.59, indicating a bullish trend. The MACD of 0.42 indicates Negative momentum. The RSI at 69.90 is Neutral, neither overbought nor oversold. The STOCH value of 74.83 is Neutral, 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
VSCO	71 Outperform	$4.17B	25.87	31.50%	―	2.97%	9.85%
Sector *	61 Neutral	$18.38B	12.79	-2.54%	3.03%	1.52%	-15.83%
RENT	54 Neutral	$213.08M	―	―	―	2.91%	94.12%
SFIX	54 Neutral	$727.36M	―	-14.67%	―	-0.08%	73.05%
TLYS	48 Neutral	$57.90M	―	-34.77%	―	-8.31%	36.10%
LVLU	48 Neutral	$12.37M	-0.25	-195.23%	―	-12.10%	-44.14%
CURV	45 Neutral	$112.06M	―	―	―	-7.33%	-114.80%

Rent the Runway Corporate Events

Rent the Runway Completes Major Recapitalization Efforts

On October 28, 2025, Rent the Runway completed significant recapitalization transactions aimed at enhancing its financial stability by reducing debt and extending debt maturity. The recapitalization involved converting debt into equity and securing additional capital, which positions the company to focus on growth and customer service. The restructuring also led to changes in the board of directors, aligning with the company’s strategic goals. The transactions are expected to support Rent the Runway’s mission to innovate in the fashion rental market and maintain its position as a leader in the industry.

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.

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.

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.