Rent the Runway, Inc. (RENT) AI Stock Analysis
RENT AI stock analysis summary
AI ResearchRent the Runway, Inc. operates an online and retail platform providing designer clothing and accessories rentals primarily for women. After consecutive loss-making years, the company reached net income of $22.6M in FY2026 on revenue of $329.8M. However, the balance sheet faces significant leverage, with net debt of $167.0M and negative shareholders' equity of -$65.5M as of July 31, 2026.
- Market cap
- $59.7M
- Revenue (TTM)
- $366.9M
- P/E
- 0.2x
- 1Y return
- -60.9% S&P 500 16.8%
- Avg. target
- $40.00 2172.7% vs last close
Bull case
- Gross margin increased to 59.4% in FY2026, helping the company achieve net income of $22.6M.
- Quarterly revenue grew 20.8% year-over-year in the period ended July 31, 2026.
- The stock trades at an EV-to-EBITDA multiple of 2.0x, well below the US-listed Consumer Cyclical peer median of 11.1x.
Bear case
- Free cash flow remained negative at -$46.6M in FY2026, with cumulative annual cash generation weighed down by $50.1M in capital expenditures.
- The balance sheet is strained with negative equity of -$65.5M and total debt of $196.0M compared to $29.0M in cash.
- The 1-analyst forecast expects next fiscal year EPS of -$21.88, indicating a return to annual net losses.
What Rent the Runway does
Rent the Runway, Inc. operates as a provider of designer clothing rental services catering primarily to women. Founded in 2009 and based in Brooklyn, New York, the company serves individual and corporate clients through physical retail outlets and an online platform. Its inventory includes ready-to-wear garments, workwear, denim, casual outfits, maternity wear, outerwear, blouses, knitwear, loungewear, jewelry, handbags, activewear, ski wear, and home goods. Rent the Runway promotes a fashion-sharing economy model and develops proprietary software to manage inventory, logistics, and customer interactions.
Growth and profitability
Rent the Runway expanded revenue at a 5-year CAGR of 15.9% through FY2026, rising from $203.3M in FY2022 to $329.8M in FY2026. Gross margin improved substantially from 4.4% in FY2022 to 59.4% in FY2026. The company posted net income of $22.6M and EPS of $0.49 in FY2026, following a net loss of -$69.9M in FY2025. Over the trailing twelve months ended July 31, 2026, revenue stood at $366.9M with a profit margin of 11.8% and operating margin of -7.3%. For the latest quarter ended July 31, 2026, quarterly revenue grew 20.8% year-over-year.
Balance sheet and cash flow
As of July 31, 2026, Rent the Runway held $29.0M in cash and short-term investments against total debt of $196.0M, resulting in net debt of $167.0M. The company has negative shareholders' equity of -$65.5M and a current ratio of 0.67 on total assets of $192.4M. In FY2026, operating cash flow generated was $3.5M, but free cash flow remained negative at -$46.6M due to capital expenditures of $50.1M. Share buybacks were $400,000 during FY2026, while the share count rose 965.3% over five years.
Valuation and performance
At a share price of $1.76, Rent the Runway carries a market capitalization of $59.7M and an enterprise value of $225.0M. Its trailing P/E is 0.2x and its price-to-sales ratio is 0.2x, below the median of its US-listed Consumer Cyclical peers of 18.0x and 0.7x, respectively. The stock's EV-to-EBITDA multiple of 2.0x is also lower than the peer median of 11.1x. Over the past year, the stock fell 60.9%, trailing the S&P 500 (SPY), which gained 16.8%.
What analysts expect
One analyst covering the company projects next fiscal year revenue of $302.6M, reflecting 2.7% growth, along with an EPS estimate of -$21.88. The mean price target is $40.00, representing a 2172.7% premium over the last close of $1.76. Rent the Runway has beaten EPS estimates in 2 of the last 4 quarters.
Key risks and what to watch
- A current ratio of 0.67 indicates potential short-term liquidity stress.
- Short interest sits at 31.9% of float, indicating elevated market skepticism.
- The share count grew 965.3% over 5 years, presenting a history of heavy equity dilution.
AI-generated research summary. Written with AI from Quotelinks data as of October 16, 2026 and checked so every figure matches that data. For information only, not investment advice. Disclaimer
About this RENT AI stock analysis
This page is an AI-written research summary of Rent the Runway, Inc. (RENT). The text was generated on October 30, 2026 from Quotelinks data as of October 16, 2026 (company profile, annual results, latest balance sheet, valuation, price performance and analyst estimates). An automatic check rejects any draft that contains a figure not found in that data. It is not investment advice; verify figures on the linked tabs before making decisions.
Related: RENT income statement, RENT balance sheet, RENT key metrics, RENT analyst forecast, RENT chart. See the RENT stock overview for the latest quote and news.
RENT AI stock analysis FAQ
What is Rent the Runway's revenue and profitability profile?
In FY2026, Rent the Runway recorded revenue of $329.8M and net income of $22.6M, though its operating margin was -17.4%. Over the trailing twelve months ended July 31, 2026, revenue reached $366.9M with a net profit margin of 11.8%.
How leveraged is Rent the Runway's balance sheet?
As of July 31, 2026, the company held $29.0M in cash and short-term investments against $196.0M in total debt, yielding net debt of $167.0M. Shareholders' equity was negative at -$65.5M.
Does Rent the Runway pay a dividend?
Rent the Runway does not pay a dividend. Capital allocation in FY2026 included $50.1M in capital expenditures and $400,000 in share repurchases.
What are analysts forecasting for Rent the Runway?
The single analyst providing estimates models next fiscal year revenue of $302.6M and an EPS of -$21.88. The consensus mean price target is $40.00, compared to a last close of $1.76.