It was an utter win for The RealReal (NASDAQ:REAL), as the clothing retailer not only delivered in its earnings report but also got some analyst attention out of the deal as well. In fact, it was a win sufficiently to send RealReal shares up over 37% in Wednesday morning’s trading, and it mostly held those gains into the afternoon’s session as well.
The RealReal posted earnings that came in at -$0.15 per share. However, this was more than enough for a win, as analysts were expecting -$0.26 per share. Revenue proved a more outright win, coming in at $133 million against analyst expectations looking for $125.21 million. However, this win was somewhat tainted as it was 6.8% lower than what it was in 2022’s third quarter. Analysts, meanwhile, were increasingly in. Ike Boruchow with Wells Fargo called this “…one of their (RealReal’s) best prints in recent memory.” And Anna Andreeva with Needham looks for RealReal to be profitable even without its new revenue streams.
New revenue streams? Yes, The RealReal has recently expanded to include insurance as well as advertising. While there were some concerns back when it started doing this about whether shoppers would consider the ads useful and relevant or just an obvious cash-grab waste of time, the early reports suggest they’ve proven worthwhile and are contributing to the bottom line. Throw in the macroeconomic conditions, which support just about any kind of second-hand shopping as shoppers squeezed by inflation are looking for bargains where they can be found, and that suggests good things ahead for The RealReal.
Is RealReal a Good Stock to Buy?
Turning to Wall Street, analysts have a Hold consensus rating on REAL stock based on three Holds assigned in the past three months, as indicated by the graphic below. Furthermore, the average REAL price target of $2.25 per share implies 3.21% upside potential.
