REAL - RealReal: Return To GMV Growth May Spark The Beginning Of A Rebound

2024-06-13 06:09:22 ET

Summary

• The RealReal has returned to 2% y/y GMV growth in Q1, following a -9% y/y decline in Q4.
• Impressively, Q1 GMV also grew nominally versus the Q4 holiday quarter. The company expects continued GMV acceleration in Q2.
• REAL's decision to focus on consignment revenue and ditch its direct sales business has also dramatically improved its profitability.
• The stock trades cheaply at just ~1x FY25 revenue, despite a current gross margin profile of ~75%.

As the stock market continues to hover near all-time highs, I continue to sprinkle small pieces of my portfolio into small-cap turnaround plays that will have less correlation to the broader markets if a correction happens. One of the most interesting rebound plays here is The RealReal ( REAL ), a luxury consignment platform that has recently undergone a major business transition and is poised to return to growth....

For further details see: