Wells Fargo upgrades The RealReal (REAL.US) to Overweight on profit structure optimization and growth potential

In its latest analysis, analyst Ike Boruchow of Wells Fargo Bank expressed optimism about the prospects of The RealReal (REAL.US), an e-commerce platform for luxury goods, by upgrading its stock rating to Overweight. Boruchow believes that The RealReal's market performance has not fully reflected its significant changes. He emphasized that The RealReal's future development potential is huge, as its profit structure is optimized and revenue growth is re-accelerated.Specifically, Boruchow delved into The RealReal's operating data, noting one of the most noteworthy changes is the increase in the commission rate for goods priced below $100. This strategy not only provides greater sales incentives for high-value goods but also significantly expands the profit margin for low-value goods. In addition, The RealReal has taken a series of measures to reduce debt risk, further enhancing its financial stability.Looking ahead, Boruchow and his team are optimistic about The RealReal's total transaction volume trend, expecting it to accelerate to double-digit growth. At the same time, they believe that the initiatives driving margin improvement will continue to have a positive impact, laying the foundation for The RealReal to achieve positive EBITDA. It is worth noting that The RealReal has clearly stated its commitment to achieving positive free cash flow in fiscal year 25, further strengthening investors' confidence in its future development.Based on the above analysis, Wells Fargo Bank sets a Wall Street high target price of $15 for The RealReal, reflecting its strong bullishness on the stock's future performance. It is worth noting that the 52-week price range of the stock is $1.52 to $6.57, and short positions account for 15.2% of the total shares outstanding. This rise not only reflects the positive expectations of the market for The RealReal's future development but also highlights investors' re-evaluation of the stock's value.