The RealReal: With Active Buyers And GMV Accelerating, I'm All In

Nov. 06, 2024 1:58 AM ETThe RealReal, Inc. (REAL) StockREAL
Gary Alexander
31.2K Followers
(10min)

Summary

  • The RealReal's shift to a consignment model has driven revenue growth, improved gross margins, and increased active buyers, leading to strong Q3 performance.
  • GMV growth re-accelerated to 6% y/y in Q3, while the company also gained trailing 3-moonth active buyers.
  • REAL is pushing its luxury sales managers to procure products with higher GMV and margins, which should help the company retain richer margins into FY25.
  • Despite macroeconomic risks and a sizable net debt, the company’s turnaround strategy and post-earnings momentum make it a compelling buy.
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One clear theme so far has rung loud and clear across the Q3 earnings season: never underestimate a small-cap rebound story. Though the tougher macroeconomic tides have indeed put plenty of pressure on certain underperforming businesses, a number of companies have also executed

This article was written by

31.2K Followers
With combined experience of covering technology companies on Wall Street and working in Silicon Valley, and serving as an outside adviser to several seed-round startups, Gary Alexander has exposure to many of the themes shaping the industry today. He has been a regular contributor on Seeking Alpha since 2017. He has been quoted in many web publications and his articles are syndicated to company pages in popular trading apps like Robinhood.

Analyst’s Disclosure:I/we have a beneficial long position in the shares of REAL either through stock ownership, options, or other derivatives. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

Seeking Alpha's Disclosure: Past performance is no guarantee of future results. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. Any views or opinions expressed above may not reflect those of Seeking Alpha as a whole. Seeking Alpha is not a licensed securities dealer, broker or US investment adviser or investment bank. Our analysts are third party authors that include both professional investors and individual investors who may not be licensed or certified by any institute or regulatory body.

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