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The RealReal Financial Strength

: 2 (As of Jun. 2022)
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The RealReal has the Financial Strength Rank of 2. It displays poor financial strength and is likely in financial distress. Usually this is caused by too much debt for the company.

Warning Sign:

The RealReal Inc displays poor financial strength. Usually, this is caused by too much debt for the company.

GuruFocus Financial Strength Rank measures how strong a company's financial situation is. It is based on these factors:

1. The debt burden that the company has as measured by its Interest Coverage (current year). The higher, the better.
2. Debt to revenue ratio. The lower, the better.
3. Altman Z-Score.

The RealReal did not have earnings to cover the interest expense. The RealReal's debt to revenue ratio for the quarter that ended in Jun. 2022 was 0.97. As of today, The RealReal's Altman Z-Score is -1.35.


Competitive Comparison

For the Luxury Goods subindustry, The RealReal's Financial Strength, along with its competitors' market caps and Financial Strength data, can be viewed below:

* Competitive companies are chosen from companies within the same industry, with headquarter located in same country, with closest market capitalization; x-axis shows the market cap, and y-axis shows the term value; the bigger the dot, the larger the market cap. Note that "N/A" values will not show up in the chart.

   

The RealReal Financial Strength Distribution

For the Retail - Cyclical industry and Consumer Cyclical sector, The RealReal's Financial Strength distribution charts can be found below:

* The bar in red indicates where The RealReal's Financial Strength falls into.



The RealReal Financial Strength Calculation

GuruFocus Financial Strength Rank measures how strong a company's financial situation is. It is based on these factors

A company ranks high with financial strength is likely to withstand any business slowdowns and recessions.

1. The debt burden that the company has as measured by its Interest Coverage (current year). The higher, the better.

Note: If both Interest Expense and Interest Income are empty, while Net Interest Income is negative, then use Net Interest Income as Interest Expense.

Interest Coverage is a ratio that determines how easily a company can pay interest expenses on outstanding debt. It is calculated by dividing a company's Operating Income (EBIT) by its Interest Expense:

The RealReal's Interest Expense for the months ended in Jun. 2022 was $-2.7 Mil. Its Operating Income for the months ended in Jun. 2022 was $-51.0 Mil. And its Long-Term Debt & Capital Lease Obligation for the quarter that ended in Jun. 2022 was $581.3 Mil.

The RealReal's Interest Coverage for the quarter that ended in Jun. 2022 is

The RealReal did not have earnings to cover the interest expense.

The higher the ratio, the stronger the company's financial strength is.

2. Debt to revenue ratio. The lower, the better.

The RealReal's Debt to Revenue Ratio for the quarter that ended in Jun. 2022 is

Debt to Revenue Ratio=Total Debt (Q: Jun. 2022 ) / Revenue
=(Short-Term Debt & Capital Lease Obligation + Long-Term Debt & Capital Lease Obligation) / Revenue
=(19.97 + 581.344) / 617.74
=0.97

3. Altman Z-Score.

Z-Score model is an accurate forecaster of failure up to two years prior to distress. It can be considered the assessment of the distress of industrial corporations.

The zones of discrimination were as such:

When Z-Score is less than 1.81, it is in Distress Zones.
When Z-Score is greater than 2.99, it is in Safe Zones.
When Z-Score is between 1.81 and 2.99, it is in Grey Zones.

The RealReal has a Z-score of -1.35, indicating it is in Distress Zones. This implies bankrupcy possibility in the next two years.

Warning Sign:

Altman Z-score of -1.35 is in distress zone. This implies bankruptcy possibility in the next two years.

* For Operating Data section: All numbers are indicated by the unit behind each term and all currency related amount are in USD.
* For other sections: All numbers are in millions except for per share data, ratio, and percentage. All currency related amount are indicated in the company's associated stock exchange currency.


The RealReal  (NAS:REAL) Financial Strength Explanation

The maximum rank is 10. Companies with rank 7 or higher will be unlikely to fall into distressed situations. Companies with rank of 3 or less are likely in financial distress.

The RealReal has the Financial Strength Rank of 2. It displays poor financial strength and is likely in financial distress. Usually this is caused by too much debt for the company.


The RealReal Financial Strength Related Terms

Thank you for viewing the detailed overview of The RealReal's Financial Strength provided by GuruFocus.com. Please click on the following links to see related term pages.


The RealReal Business Description

The RealReal logo
Traded in Other Exchanges
Address
55 Francisco Street, Suite 600, San Francisco, CA, USA, 94133
The RealReal is the largest luxury resale platform in the U.S., generating $1.48 billion in 2021 gross merchandise volume and addressing a niche (personal luxury resale) that had previously been serviced by inefficient upscale boutiques and local pawn shops. The firm generates revenue via consignment and first-party sales on its online marketplace, and through direct sales across its brick-and-mortar footprint. With a hands-on approach that actively sources inventory and authenticates every item on its platform, The RealReal is able to justify much higher take rates than peers, working out to roughly 25% of gross merchandise value (or 35% of net merchandise value, which excludes returns, cancellations, and first-party sales).
Executives
Julian Robert K. officer: Chief Financial Officer C/O SPORTSMAN'S WAREHOUSE 7035 SOUTH HIGH TECH DRIVE MIDVALE UT 84047
Katz Karen director
Katz Arnon officer: Chief Product & Technology Off 3331 VERDUN AVE SAN MATEO CA 94403
Grede Emma director C/O 55 FRANCISCO STREET SAN FRANCISCO CA 94133
Kumin Michael Andrew director C/O GREAT HILL PARTNERS, L.P. 200 CLARENDON STREET, 29TH FLOOR BOSTON MA 02116
Baird Gilbert L. Iii director 5075 S. SYRACUSE ST. DENVER CO 80237
Great Hill Partners Gp V, L.p. 10 percent owner 200 CLARENDON STREET 29TH FLOOR BOSTON MA 02116
Ghp V, Llc 10 percent owner C/O GREAT HILL PARTNERS, L.P. 200 CLARENDON STREET, 29TH FLOOR BOSTON MA 02116
Great Hill Equity Partners V, L.p. 10 percent owner C/O GREAT HILL PARTNERS 200 CLARENDON STREET, 29TH FLOOR BOSTON MA 02116
Great Hill Investors Llc 10 percent owner 200 CLARENDON STREET 29TH FLOOR BOSTON MA 02116
Coleman Caretha director 26855 ORTEGA DRIVE LOS ALTOS HILLS CA 94022
Melton Carol A director 4445 WILLARD AVENUE, SUITE 400 CHEVY CHASE MD 20815
Suko Todd A officer: Chief Legal Officer and Secy. 7251 WEST 4TH STREET GREELEY CO 80634
Ibrahim Maha Saleh director 2765 SAND HILL ROAD MENLO PARK CA 94025
Lo Steve Ming officer: VP, Corporate Controller 55 FRANCISCO ST, 6TH FLOOR SAN FRANCISCO CA 94133

The RealReal Headlines

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