The Realreal Inc Up 24.84% To $2.05 After Earnings Beat

Wednesday, November 8, 2023 - The Realreal Inc (REAL) reported upside earnings and revenues today.

The consensus among analysts for The Realreal Inc was for an earnings per share (EPS) loss of $0.26 per share. The firm was able to surpass those projections, reporting an EPS loss of $0.15 per share, a positive surprise of $0.11 (42%). Profits rose 61% year-over-year after reporting an EPS loss of $0.38 per share in its year-ago quarter. The positive growth rate signals that the Consumer Cyclical company is performing well amid recent economic conditions.

Revenues were upbeat at $133.2 million. That represents a 6.68% decrease in revenues from the year-ago report and is 6.17% higher than consensus estimates set at $125.4 million.

The stock is up 24.84% to $2.05 after the report.

The firm's lower revenue growth to earnings signals that the firm has been able to reduce costs and improve its profit margin overall.

Wall Street Analysts had an average rating of Hold on the stock prior to the report.

InvestorsObserver gives the stock a Bullish Sentiment score at the moment based on recent trading.

Prior to the report, InvestorsObserver gave the stock an overall score of 68. Meanwhile, the average Wall Street analyst rated the stock a Hold.

The RealReal is the largest luxury resale platform in the U.S., generating $1.48 billion in 2021 gross merchandise volume and addressing a niche (personal luxury resale) that had previously been serviced by inefficient upscale boutiques and local pawn shops. The firm generates revenue via consignment and first-party sales on its online marketplace, and through direct sales across its brick-and-mortar footprint. With a hands-on approach that actively sources inventory and authenticates every item on its platform, The RealReal is able to justify much higher take rates than peers, working out to roughly 25% of gross merchandise value (or 35% of net merchandise value, which excludes returns, cancellations, and first-party sales).