RENT - Analysts dig into Rent the Runway after drop in subscribers

Rent the Runway ( NASDAQ: RENT ) is being dissected by Wall Street analysts following the online retailer's Q2 earning report which featured a drop in subscribers and the announcement of a new restructuring plan.

Credit Suisse downgraded Rent the Runway ( RENT ) to Neutral from Outperform after warning that it overestimated the impact a return to social events would have on the fashion rental company’s active subscriber growth in its second quarter.

"The significant deterioration in Active Customer trends in the quarter (QoQ active sub growth slowed to -8% in 2Q vs Street +7%, decelerating from +17% in 1Q) suggest that RENT is more susceptible to macro pressure on the aspirational consumer than we expected," noted analyst Michael Binetti.

Binetti also pointed to the significant drop in active customer trends in Q2 and warned that the online retailer is more susceptible to macro pressures than anticipated.

Barclays slashed its price target on RENT to $4.

Meanwhile, Morgan Stanley is still positive on Rent the Runway ( RENT ) with the big post-earnings drop just taking shares back to where they stood a week ago.

"Our FY22 EBITDA dollar forecasts move higher and our out-years remain largely unchanged, but with more uncertainty. June/July slowdown similar to what we've heard from others, and August/September rebound encouraging," updated analyst Lauren Schenk.

MS kept an Overweight rating on RENT and cut its price target to $13.

Shares of Rent the Runway ( RENT ) fell 22.52% in premarket trading on Tuesday to $3.82 vs. the 52-week trading range of $2.99 to $24.77.

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