Wells Fargo analyst Ike Boruchow has upgraded TheRealReal (REAL, Financial) to "Overweight," reflecting optimism about the company's future. He highlights that market performance has yet to fully reflect significant changes within the company. With optimized profit structures and renewed revenue growth, TheRealReal shows great potential.
Key changes include increased commission rates on items priced under $100, boosting profitability for low-value goods while incentivizing high-value sales. The company has also taken steps to reduce debt risk, enhancing financial stability.
Looking ahead, Boruchow expects double-digit growth in TheRealReal's gross merchandise value. Profit margin improvement initiatives are expected to support positive EBITDA, with a commitment to positive free cash flow by fiscal year 2025. Wells Fargo has set a $15 target price, the highest on Wall Street, reflecting strong confidence in the stock's future performance.
