The RealReal (REAL) Stock Forecast & Price Target

The RealReal has demonstrated impressive growth metrics, highlighted by a quarterly increase of 23,000 active buyers, marking the largest sequential rise since Q4 2022, and reaching over 1 million active buyers, an all-time high. The company has achieved a 17% revenue growth, supported by improvements in operational efficiency, with adjusted EBITDA margins expanding by 380 basis points year-over-year to 5.4%, as non-GAAP operating expenses were leveraged significantly. The favorable supply momentum, evidenced by double-digit growth in new and repeat consignors and increasing sales team productivity, reinforces a positive outlook for sustained increase in free cash flow and overall financial health.

The RealReal could face a significant decline in sales, potentially falling 10%-15% below estimates by 2026, primarily due to challenges in expanding its consignor base and mitigating macroeconomic conditions that affect discretionary spending. Additionally, a perceived decline in the allure of luxury goods, driven by a lack of innovation and price inflation, may shift consumer interest away from the brand, further limiting its market appeal. The company's reliance on a pre-authentication model poses risks, as competition from less stringent resale platforms may erode market share, while concerns over counterfeit goods could damage its reputation and hinder supplier and customer relationships.