RealReal Stock To $11?

RealReal (REAL) stock has jumped 38% during the past day, and is currently trading at $15.48. Our multi-factor assessment suggests that it may be time to sell REAL stock. We have, overall, a pessimistic view of the stock, and a price of $11 may not be out of reach. We believe there are a few things to fear in REAL stock given its overall Weak operating performance and financial condition. This isn’t appropriately reflected in the stock’s Moderate valuation which is why we think it is Unattractive.

Below is our assessment:

No matter where REAL stock goes, your portfolio should stay on track. See how High Quality Portfolio can help you do that.

Let’s get into details of each of the assessed factors but before that, for quick background: With $1.8 Bil in market cap, RealReal provides an online marketplace for consigned luxury goods, including women’s, men’s, kids’ clothing, jewelry, and watches, primarily serving customers in the United States.

[1] Valuation Looks Moderate

This table highlights how REAL is valued vs broader market. For more details see: REAL Valuation Ratios

[2] Growth Is Moderate

• RealReal has seen its top line grow at an average rate of 4.2% over the last 3 years
• Its revenues have grown 13% from $565 Mil to $637 Mil in the last 12 months
• Also, its quarterly revenues grew 14.0% to $165 Mil in the most recent quarter from $145 Mil a year ago.

This table highlights how REAL is growing vs broader market. For more details see: REAL Revenue Comparison

[3] Profitability Appears Very Weak

• REAL last 12 month operating income was $-42 Mil representing operating margin of -6.7%
• With cash flow margin of 0.8%, it generated nearly $5.2 Mil in operating cash flow over this period
• For the same period, REAL generated nearly $-35 Mil in net income, suggesting net margin of about -5.6%

This table highlights how REAL profitability vs broader market. For more details see: REAL Operating Income Comparison

[4] Financial Stability Looks Very Strong

• REAL Debt was $473 Mil at the end of the most recent quarter, while its current Market Cap is $1.8 Bil. This implies Debt-to-Equity Ratio of 26.8%
• REAL Cash (including cash equivalents) makes up $94 Mil of $349 Mil in total Assets. This yields a Cash-to-Assets Ratio of 27.0%

[5] Downturn Resilience Is Very Weak

REAL has fared much worse than the S&P 500 index during various economic downturns. We assess this based on both (a) how much the stock fell and, (b) how quickly it recovered.

2022 Inflation Shock

• REAL stock fell 96.4% from a high of $28.73 on 17 February 2021 to $1.03 on 2 May 2023 vs. a peak-to-trough decline of 25.4% for the S&P 500.
• The stock is yet to recover to its pre-Crisis high
• The highest the stock has reached since then is $15.48 on 11 November 2025 $15.48

 
2020 Covid Pandemic

• REAL stock fell 71.0% from a high of $18.85 on 1 January 2020 to $5.46 on 23 March 2020 vs. a peak-to-trough decline of 33.9% for the S&P 500.
• However, the stock fully recovered to its pre-Crisis peak by 17 December 2020

But the risk is not limited to major market crashes. Stocks fall even when markets are good – think events like earnings, business updates, outlook changes. Read REAL Dip Buyer Analyses to see how the stock has recovered from sharp dips in the past.

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