REAL - The RealReal stock price surged after earnings: still a buy?
2024-03-04 06:11:05 ET
The RealReal (NASDAQ: REAL) stock price surged by more than 50% on Friday after the company published encouraging financial results. The stock jumped to a high of $2.88, its highest point since September 5th. At its highest point, it has risen by over 190% from its lowest point in 2023.
Strong financial results as turnaround continues
The RealReal published strong financial results. In a statement, the company said that its net loss narrowed to $22 million in the fourth quarter from the previous period’s $39 million. Its annual loss also narrowed to $168 million.
Most importantly, the company published positive EBITDA and cash flow for the first time. This trend happened even as the company’s revenue dropped by 10% to $143 million. Its Gross Merchandise Value (GMV) slipped by 9% to $451 million.
The RealReal also announced more measures to implement its turnaround. It raised additional capital, which reduced its total debt by $17 million. As a result, it means that the company may not need to raise additional capital this year.
The company has also announced new plans to open new physical stores. It plans to open up to three stores and is aiming to get to 30 stores in the coming years.
The firm may also benefit from the rising demand for luxury goods as global stocks and cryptocurrencies jump.
In the US, the Nasdaq 100 and S&P 500 indices surged to a record high. Similarly, Bitcoin has soared to $65,000 for the first time in over two years. Ethereum has moved above $3,500 while the total market cap of all coins has jumped to over $2.4 trillion.
In most cases, as we saw in 2021, luxury goods tend to do well when stocks and cryptocurrencies are in an uptrend.
The RealReal stock price forecast
Turning to the daily chart, we see that the REAL stock price formed a strong up-gap on Friday. It moved from Thursday’s close of $1.80 and reached a high of $2.88 on Friday.
As it jumped, the stock surged above the key resistance point at $2.54, its highest swing on December 14th.
It has also jumped above the 50-day and 25-day Exponential Moving Averages (EMA) in a high-volume environment.
The Percentage Price Oscillator (PPO) has also moved above the neutral point. Therefore, the stock will likely retreat slightly, retest the support at $2.54, and then continue soaring as bulls target the psychological point at $3.
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