B. Riley Initiates Coverage on The RealReal with "Buy" Rating, Sets Price Target of $8.00

The RealReal shares surged 7% after B. Riley Securities initiated coverage with a "Buy" rating and a $8 price target. The firm attributed the positive outlook to the company's improved profit margins, positive adjusted EBITDA for three straight quarters, and its domestic supply chain. The RealReal's shares are down 42.6% YTD and trading 49.5% below its 52-week high.

The RealReal Inc. (NASDAQ: REAL) shares surged 7% after B. Riley Securities initiated coverage with a "Buy" rating and set an $8.00 price target. The firm attributed the positive outlook to the company's improved profit margins, positive adjusted EBITDA for three consecutive quarters, and its domestic supply chain. The RealReal's shares are down 42.6% year-to-date (YTD) and trading 49.5% below its 52-week high.

B. Riley highlighted The RealReal’s significant margin improvements, noting approximately 12 percentage points of gross margin expansion since the first quarter of 2023, driven by refinements to the commission structure and normalization of segment mix that deemphasized direct buying. The research firm also pointed to The RealReal’s achievement of positive adjusted EBITDA for three consecutive quarters, with expectations for continued improvement as the company leverages its platform investments.

The RealReal has been actively reducing its debt, having paid off the remaining $26.75 million of its convertible notes due in 2025. This move is part of a broader strategy to strengthen its financial position, with a total debt reduction of $81 million over the past 16 months.

The company's domestic supply chain, primarily consisting of pre-owned goods, was described as "particularly attractive" by B. Riley, amid tariff-related cost disruptions affecting competitors in the primary market.

In other recent news, The RealReal reported its Q1 2025 financial results, surpassing expectations with an earnings per share (EPS) of -$0.08, slightly better than the forecasted -$0.09. The company also achieved a revenue of $160 million, exceeding the anticipated $159.83 million and marking an 11% increase year-over-year. The RealReal has reaffirmed its full-year 2025 guidance, projecting GMV between $1.96 billion and $1.99 billion, and revenue between $645 million and $660 million.

The RealReal's shares have been volatile, trading 49.5% below its 52-week high, but the positive analyst rating and strong financial performance indicate a potential turnaround. Investors should closely monitor the company's progress in achieving its guidance and the broader market conditions that may impact its performance.

References:
[1] https://za.investing.com/news/analyst-ratings/the-realreal-stock-initiated-with-buy-rating-at-briley-on-margin-growth-93CH-3792484
[2] https://www.bloomberg.com/news/articles/2025-07-16/rare-earth-stocks-set-to-extend-rally-following-apple-mp-deal