There is no way The RealReal Inc. (REAL) can keep these numbers up

With 1.95 million shares changed hands, the volume of the stock remained lighter than its average volume of 4.02 million shares. During the session, the Specialty Retail company that operates in wider Consumer Cyclical sector, reached to the highest price of $1.4500 whereas the lowest price it dropped to was $1.3550. The 52-week range on REAL shows that it touched its highest point at $16.37 and its lowest point at $1.15 during that stretch. It currently has a 1-year price target of $4.17. Beta for the stock currently stands at 2.29.

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Price Performance and Earnings:

Stock performance is one of the indicators that investors use to determine whether they will profit from a stock. The price performance of REAL was down-trending over the past week, with a drop of -17.16%, but this was down by -10.83% over a month. Three-month performance dropped to -41.18% while six-month performance fell -49.64%. The stock lost -90.57% in the past year, while it has lost -87.94% so far this year. A look at the trailing 12-month EPS for REAL yields -2.23 with Next year EPS estimates of -1.25. For the next quarter, that number is -0.36. This implies an EPS growth rate of -28.70% for this year and 23.80% for next year.

Float and Shares Shorts:

At present, 96.70 million REAL shares are outstanding with a float of 94.75 million shares on hand for trading. On Oct 30, 2022, short shares totaled 13.7 million, which was 13.97% higher than short shares on Sep 29, 2022. In addition to Ms. Rati Sahi Levesque as the firm’s Co-Interim CEO, Pres & COO, Mr. Robert K. Julian serves as its Co-Interim CEO & CFO.

Institutional Ownership:

Through their ownership of 75.80% of REAL’s outstanding shares, institutional investors have majority control over the company. Other institutions hold 39.74% of REAL, in contrast to 26.66% held by mutual funds. Shares owned by individuals account for 23.91%. As the largest shareholder in REAL with 6.11% of the stake, BlackRock Fund Advisors holds 5,839,024 shares worth 5,839,024. A second-largest stockholder of REAL, The Vanguard Group, Inc., holds 5,567,886 shares, controlling over 5.83% of the firm’s shares. Fidelity Investments Canada ULC is the third largest shareholder in REAL, holding 3,740,000 shares or 3.92% stake. With a 3.44% stake in REAL, the Vanguard Total Stock Market Index is the largest stakeholder. A total of 3,282,434 shares are owned by the mutual fund manager. The iShares Russell 2000 ETF, which owns about 2.09% of REAL stock, is the second-largest Mutual Fund holder. It holds 1,999,868 shares valued at 3.38 million. Fidelity Climate Leadership Fund holds 1.93% of the stake in REAL, owning 1,840,000 shares worth 3.11 million.

An Overview of Recent Financials:

Understanding a company as a customer does not mean you will understand it as an investor. The wise investor uses quantitative research to analyze metrics such as revenue, net income, and earnings. In its fiscal quarter reported on Sep 29, 2022, REAL reported revenue of $154.44M and operating income of -$50.98M. The EBITDA in the recently reported quarter was -$43.76M and diluted EPS was -$0.56.

Analysts Ratings:

Reading analyst opinions is an effective way to decide where to invest, and there are several opinions available for REAL since 15 analysts follow the stock currently. There are 6 analysts who recommend BUY ratings, while 0 suggest SELL ratings. Of the remaining analysts, 7 believe that the stock is worth HOLDING, 1 give it an OVERWEIGHT rating, and 1 thinks that it’s UNDERWEIGHT. In the same way, a target price assigned to a stock can also reveal much about its potential. With REAL analysts setting a high price target of $9.00 and a low target of $1.00, the average target price over the next 12 months is $3.65. Based on these targets, REAL could surge 542.86% to reach the target high and fall by -28.57% to reach the target low. Reaching the average price target will result in a growth of 160.71% from current levels.

EPS: Estimates vs Actual

It is also common to use earnings estimates to evaluate a firm’s growth potential and to determine trading strategy. REAL will report FY 2022 earnings on 02/21/2023. Analysts have provided yearly estimates in a range of -$1.56 being high and -$2.26 being low. For REAL, this leads to a yearly average estimate of -$1.78. The earnings surprise of a firm occurs when the actual results change from the consensus earnings estimate. The RealReal Inc. surprised analysts by $0.07 when it reported -$0.38 EPS against a consensus estimate of -$0.45. The surprise factor in the prior quarter was $0.07. Based on analyst estimates, the high estimate for the next quarter is -$0.29 and the low estimate is -$0.47. The average estimate for the next quarter is thus -$0.38.

Summary of Insider Activity:

Insiders traded REAL stock several times over the past three months with 0 Buys and 3 Sells. In these transactions, 0 shares were bought while 72,093 shares were sold. The number of buy transactions has increased to 16 while that of sell transactions has risen to 65 over the past year. The total number of shares bought during that period was 1,158,679 while 418,455 shares were sold.

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