![]() ![]() Investors may need to be convinced the company can achieve profitability before they step in, however. That’s below where it was trading yesterday, but above where it trades now. Rival fashion rental service Stitch Fix (NASDAQ: SFIX) cut 15% of its workforce in June, much like Rent the Runway.Īssuming Rent the Runway can get costs below revenues, it could draw a market cap equal to its expected annual revenue of $300 million. Rising interest rates and a falling market mean fast-growing companies can no longer rely on external capital to fuel growth. Inflation has caused people to cut unnecessary expenses, including high-end fashion. Other factors are in play with RENT stock, though. These plans allow for between 4 and 16 items per month. In addition to the job cuts, Rent the Runway is dumping an “unlimited” rental option in favor of plans ranging from $89 to $199 a month. Now, only 20% of rentals are work-related. Hyman says most of the company’s pre-pandemic revenue came from women looking for work clothes. Rent the Runway ended July with about 124,000 active subscribers, up 27% YOY but down from the 135,000 reported in Q1. The company has burned through $878 million in cash since its inception. The company announced job cuts despite beating revenue estimates by $3 million and earnings estimates by 12 cents per share.ĬEO Jenn Hyman says the job cuts are meant to get costs below revenue and show a profit. A move above this resistance will signal that there are more buyers left in the market.Rent the Runway is just the latest clothing retailer to be hit by inflation and recession fears. Therefore, I suspect that the stock will rise and retest the important resistance at $3 and then resume the downward trend. Stochastic Oscillator moved above the overbought level. The Relative Strength Index (RSI) surged to 82, meaning that it is extremely overbought. As it rose, the stock managed to move above the 50-day and 100-day moving averages. ![]() The 4H chart shows that the RENT stock price made a strong comeback this week. Rent the Runway stock price forecast Copy link to section If there is indeed a stock market rally, it will likely be led by value stocks. The company will also likely struggle as investors continue their rotation from growth to value. The other main challenge is related to macro factors since interest rates are expected to remain at an elevated level. Despite its restructuring, the company will continue burning cash in the coming quarters. Still, the Rent the Runway stock price faces a difficult period despite strong quarterly results. Rotation from growth to value Copy link to section It also expects that its restructuring costs will be between $25 million and $27 million. The company expects that its revenue for the fourth quarter will be between $72 million and $74 million. It expects that it will reduce its cash burn by $30 million. Most importantly, the company’s restructuring process is yielding results. Its gross margins rose to 40% for the second quarter in a row. In a statement, the company said that its total revenue rose to $77.4 million in the third quarter.t The 31% year-on-year growth was better than what analysts were expecting. It has 134,000 active subscribers, which is a good number for a company of its scale. The subscription package goes for $99 per month. Rent the Runway makes money by renting these clothes directly and through subscriptions. For example, customers can a Ronny Kobo dress that goes for $525 for just $80. Rent the Runways is a fashion technology company that makes it possible for people to rent high-end clothes and accessories. Is this a dead cat bounce? Copy link to section Shares of the embattled company have collapsed by more than 89% from its highest level this year. It has soared by over 115% from the lowest level this year. The shares surged to a high of $2.5, the highest level since October 6. Rent the Runway ( NASDAQ: RENT) stock price popped by more than 70% on Thursday after the company published strong results. ![]()
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