The RealReal (REAL) Stock Forecast & Price Target

The RealReal demonstrated significant growth in its operational metrics, with active buyers increasing by 23,000 quarter-over-quarter, marking the largest sequential rise since the fourth quarter of 2022. The company achieved a 17% revenue growth, benefiting from improved operational efficiency that leveraged non-GAAP operating expenses by approximately 470 basis points year-over-year, alongside a 380 basis point expansion in adjusted EBITDA margin, reaching 5.4%. With a strategic focus on enhancing inventory sourcing and strengthening its supply-driven approach, The RealReal expects to continue expanding free cash flow and improve its balance sheet liquidity, thus supporting a positive long-term financial outlook.

The RealReal, while positioned as the largest luxury resale platform in the U.S. with an anticipated $1.8 billion in gross merchandise volume for 2024, faces significant risks that could hinder future performance, including projected sales declines of 10%-15% by 2026. The company's reliance on effective marketing strategies to attract new consignors is critical, yet there are concerns about declining consumer interest in luxury goods due to factors like lack of innovation and rising prices, which may shift demand towards secondhand platforms. Moreover, macroeconomic uncertainties and competition from companies that do not require authentication could further dilute The RealReal’s market share and negatively impact its ability to sustain or grow its consignor base.