Rent the Runway, Inc. (NASDAQ:RENT) Financial Performance Analysis
- Rent the Runway's ROIC is significantly lower than its WACC, indicating inefficiency in generating returns to cover its cost of capital.
- Compared to its peers, ThredUp Inc. (TDUP) and Allbirds, Inc. (BIRD), Rent the Runway is underperforming in terms of ROIC to WACC ratio.
- Warby Parker Inc. shows the closest to breaking even among the companies analyzed, suggesting better capital utilization efficiency.
Rent the Runway, Inc. (NASDAQ:RENT) is a fashion rental service that allows customers to rent designer clothing and accessories. The company aims to revolutionize the fashion industry by offering a sustainable alternative to traditional retail. Rent the Runway competes with other companies in the fashion and lifestyle sector, such as ThredUp Inc. (TDUP) and Allbirds, Inc. (BIRD).
In evaluating Rent the Runway's financial performance, the Return on Invested Capital (ROIC) is a critical metric. Rent the Runway's ROIC is -39.57%, which is significantly lower than its Weighted Average Cost of Capital (WACC) of 6.54%. This results in a ROIC to WACC ratio of -6.05, indicating that the company is not generating enough returns to cover its cost of capital.
When comparing Rent the Runway to its peers, ThredUp Inc. has a ROIC of -18.82% and a WACC of 11.66%, leading to a ROIC to WACC ratio of -1.61. This suggests that ThredUp is also struggling to generate returns above its cost of capital, but it is performing better than Rent the Runway in this regard.
Allbirds, Inc. presents a more challenging scenario with a ROIC of -80.40% and a WACC of 7.75%, resulting in a ROIC to WACC ratio of -10.37. This indicates that Allbirds is facing significant difficulties in generating returns, even more so than Rent the Runway.
Warby Parker Inc. stands out among the peers with a ROIC of -3.46% and a WACC of 13.06%, leading to a ROIC to WACC ratio of -0.26. Although still negative, Warby Parker is the closest to breaking even, suggesting it is the most efficient in utilizing its capital compared to the other companies analyzed.
| Symbol | Price | %chg |
|---|---|---|
| 9983.T | 57210 | 1.1 |
| TRENT.BO | 4624.85 | 0 |
| TRENT.NS | 4627.3 | 0 |
| BABY.JK | 330 | -0.61 |
Rent the Runway, Inc. (NASDAQ:RENT) Earnings Report Highlights
- The company reported an earnings per share (EPS) of -$6.20, missing the estimated EPS.
- RENT's revenue reached $80.9 million, surpassing the estimated $75.5 million.
- The financial metrics indicate potential cash flow challenges and financial instability, with a negative debt-to-equity ratio of -1.86.
Rent the Runway, Inc. (NASDAQ:RENT) is a fashion rental service aiming to revolutionize the fashion industry by offering a sustainable alternative to traditional retail. Despite facing competition from other fashion rental services and traditional retailers, RENT's innovative business model continues to attract attention.
On September 11, 2025, RENT reported its earnings after the market closed, revealing an EPS of -$6.20, which fell short of the estimated EPS of -$4.57. This disappointing EPS reflects the company's ongoing struggle with profitability, underscored by its negative price-to-earnings (P/E) ratio of approximately -0.42.
Despite the earnings miss, RENT's revenue was $80.9 million, surpassing the estimated $75.5 million. This revenue beat suggests that the company is generating sales, even though it is not yet profitable. The price-to-sales ratio of 0.10 indicates that the stock is trading at a low price relative to its sales, potentially attracting value investors.
The company's financial metrics reveal a complex picture. The enterprise value to sales ratio of 1.15 suggests a moderate valuation compared to revenue. However, the enterprise value to operating cash flow ratio of 20.85 indicates that the operating cash flow is not sufficient to cover the enterprise value multiple times, pointing to potential cash flow challenges.
RENT's financial stability is further questioned by its negative debt-to-equity ratio of -1.86, which may indicate financial instability or a unique capital structure. However, the current ratio of 1.22 suggests that RENT has a reasonable level of liquidity to cover its short-term liabilities, providing some reassurance to investors.
Rent the Runway, Inc. (NASDAQ:RENT) Faces Financial Challenges Despite Improved Momentum
- RENT reported an actual EPS of -$4.94, showing improvement from the previous year's loss.
- The company's revenue for the quarter was $75.9 million, slightly below estimates.
- Despite financial challenges, RENT is experiencing subscriber growth and improved business momentum.
Rent the Runway, Inc. (NASDAQ:RENT) is a fashion rental service that allows customers to rent designer clothing and accessories. The company aims to revolutionize the fashion industry by offering a sustainable alternative to traditional retail. RENT competes with other fashion rental services and traditional retailers. Despite its innovative approach, the company faces financial challenges.
On December 9, 2024, RENT reported its earnings with an actual earnings per share (EPS) of -$4.94, slightly better than the estimated EPS of -$4.98. This marks an improvement from the previous year's loss of $9 per share, as highlighted by Zacks. The company's revenue for the quarter was $75.9 million, just below the estimated $76.05 million.
The earnings call, attended by key corporate participants and analysts, revealed that RENT is experiencing improved business momentum. The company has returned to subscriber growth in the third quarter of 2024 and reported a record low cash consumption for the nine months ending October 31, 2024. RENT reiterated its expectation to achieve free cash flow breakeven for the fiscal year 2024.
Despite a negative price-to-earnings (P/E) ratio of -0.47, RENT's price-to-sales ratio is 0.12, suggesting the stock is relatively inexpensive compared to its sales. The enterprise value to sales ratio is 0.03, further emphasizing the company's low valuation. RENT's enterprise value to operating cash flow ratio is 2.52, indicating moderate cash flow efficiency.
RENT's financial structure includes a negative debt-to-equity ratio of -0.27, which may indicate more liabilities than equity. However, the current ratio of 1.65 suggests that the company has a good level of liquidity to cover its short-term obligations. Despite challenges, RENT is focused on operational improvements and strategic growth.
Rent the Runway, Inc. (NASDAQ:RENT) Faces Financial Challenges Despite Improved Momentum
- RENT reported an actual EPS of -$4.94, showing improvement from the previous year's loss.
- The company's revenue for the quarter was $75.9 million, slightly below estimates.
- Despite financial challenges, RENT is experiencing subscriber growth and improved business momentum.
Rent the Runway, Inc. (NASDAQ:RENT) is a fashion rental service that allows customers to rent designer clothing and accessories. The company aims to revolutionize the fashion industry by offering a sustainable alternative to traditional retail. RENT competes with other fashion rental services and traditional retailers. Despite its innovative approach, the company faces financial challenges.
On December 9, 2024, RENT reported its earnings with an actual earnings per share (EPS) of -$4.94, slightly better than the estimated EPS of -$4.98. This marks an improvement from the previous year's loss of $9 per share, as highlighted by Zacks. The company's revenue for the quarter was $75.9 million, just below the estimated $76.05 million.
The earnings call, attended by key corporate participants and analysts, revealed that RENT is experiencing improved business momentum. The company has returned to subscriber growth in the third quarter of 2024 and reported a record low cash consumption for the nine months ending October 31, 2024. RENT reiterated its expectation to achieve free cash flow breakeven for the fiscal year 2024.
Despite a negative price-to-earnings (P/E) ratio of -0.47, RENT's price-to-sales ratio is 0.12, suggesting the stock is relatively inexpensive compared to its sales. The enterprise value to sales ratio is 0.03, further emphasizing the company's low valuation. RENT's enterprise value to operating cash flow ratio is 2.52, indicating moderate cash flow efficiency.
RENT's financial structure includes a negative debt-to-equity ratio of -0.27, which may indicate more liabilities than equity. However, the current ratio of 1.65 suggests that the company has a good level of liquidity to cover its short-term obligations. Despite challenges, RENT is focused on operational improvements and strategic growth.
