Rent The Runway Analyst Cuts Forecast By 75%: 'Customer Acquisition Will Take A Hit'
Portfolio Pulse from Priya Nigam
Rent the Runway Inc (NASDAQ:RENT) shares continue to decline, losing almost 70% year to date. Despite reporting Q2 adjusted EBITDA above expectations, the company's revenue and subscriber growth disappointed. Analyst Dana Telsey downgraded the rating to Market Perform and cut the price target from $4 to $1. The company's low subscriber retention is attributed to a lack of inventory depth. The company plans to reduce promotional activity, pull back on marketing, drive cost efficiencies, and focus on rebuilding the higher-margin reserve business, which is expected to impact customer acquisition.
September 11, 2023 | 4:38 pm
News sentiment analysis
Sort by:
Ascending
NEGATIVE IMPACT
Rent the Runway's shares are expected to continue their downtrend due to disappointing revenue and subscriber growth, and a downgrade from analyst Dana Telsey. The company's strategy shift and focus on profitability over customer acquisition may further impact the stock.
The company's disappointing revenue and subscriber growth, coupled with the downgrade from analyst Dana Telsey, are likely to continue to negatively impact the stock. Additionally, the company's shift in strategy to focus on profitability over customer acquisition may further depress the stock as it could lead to a decrease in future revenue growth.
CONFIDENCE 90
IMPORTANCE 80
RELEVANCE 100