Why The RealReal’s latest quarter put the stock back in focus

The RealReal (REAL) is back on many investors’ radar after first quarter 2026 results showed double digit growth in gross merchandise value and revenue, along with higher adjusted EBITDA margins.

Management also raised full year 2026 guidance and pointed to AI driven automation and a growing buyer base as key supports for the updated outlook, helping explain the recent share price reaction.

The earnings beat, higher guidance and launch of AI features such as MyCloset have come alongside sharp share price swings, with a 34.49% 1 month share price return contrasted by a 21.52% year to date share price decline and a very large 3 year total shareholder return. This suggests momentum has recently picked up after earlier volatility in how the market assesses RealReal’s risks and potential.

If strong Q1 momentum has you thinking about where else AI is reshaping business models, this is a useful moment to scan 60 profitable AI stocks that aren't just burning cash

After a sharp 1 month rebound, a 21.52% year to date share price decline, a very large 3 year total shareholder return and a 35.8% intrinsic discount still showing, you have to ask: is there still a buying opportunity here, or is the market already pricing in future growth?

Most Popular Narrative: 31.8% Undervalued

Simply Wall St’s most followed narrative puts RealReal’s fair value at $18.19, well above the last close at $12.40, which frames the recent rebound in a different light.

Continuous investment in AI-driven automation (Athena and other initiatives) is delivering ongoing reductions in processing costs per unit and streamlining authentication, enabling scalable operational efficiencies that lower unit costs and support sustained margin expansion and improved EBITDA.

Curious what kind of revenue path, margin lift, and future profit multiple are reflected in that fair value estimate? The full narrative spells out some bold assumptions.

Result: Fair Value of $18.19 (UNDERVALUED)

However, this hinges on consignment supply and AI efficiencies. Slower progress on either could pressure margins and challenge the current $18.19 fair value story.

Another View: Multiples Paint a Tougher Picture

That 35.8% discount to fair value and $18.19 narrative target lean on future cash flow strength, but the current P/S of 2.2x tells a different story. The stock trades at more than 4x the US Specialty Retail average of 0.5x and above the peer average of 1x, while the fair ratio sits lower at 1.5x. For investors, that gap suggests the market already bakes in a lot of optimism on revenues and margins, so how comfortable are you with those assumptions holding up?

Next Steps

Mixed signals on value and risk can feel unsettling, so instead of sitting on the fence, review the data, weigh both sides and see the 4 key rewards and 2 important warning signs

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.