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RISK CONCERN
Investment Strategy, Risk Analysis, and Insights by Chartered Professionals
The Realreal, Inc. (XNAS:REAL) In-Depth Stock/Fundamental/Options Analysis Today
Primary Facts
REAL
Name:
THE REALREAL, INC. (XNAS:REAL)
Sector:
- 57801.00K
Industry:
Luxury Goods
CEO:
Ms. Julie Wainwright
Total Employees:
3,355
Our Technological Advancement Rating
Our Rating:
A
Technological advancement compared to industry is 75.66% higher
ANALYSIS OF ALL CRITICAL FACTORS & RISKS RELATED TO THE STOCK & FUNDAMENTAL/LONG-TERM ANALYSIS OF THE REALREAL, INC.(REAL) AS PER DATA ANALYSIS OF LAST 3 YEARS AND COMPARISON WITH COMPETITORS/PEERS, AND LUXURY GOODS INDUSTRY. DATE: 07/09/2022
Primary Targets/Price Insights
Previous Close ($) :
2.07
One Month Price Target:
$2.09
Six Month Price Target :
$2.21
Likely Price in One Year's Time:
Ticker:
$2.34
Likely Trading Range Today Under (Normal Volatility)
$2.05
Price Upper limit ($) :
$2.09
Price Lower limit ($) :
Crash Risk Prep/Key Price Levels (High Volatility/Risk)
Price, as per data analysis, isn't likely to fall below:
Today:
$1.82
This week:
$1.51
This month :
$.94
Other Primary facts
Market Cap:
184.39M
Market Cap Classification:
Micro Cap
Number of Shares
IPO Date:
95.54M
Best/Worst Daily Performance (Last 3+ Years)
Highest Daily Appreciation:
22.55%
-27.78%
Worst Daily Decline:
Our Options Trading Entry Points
Iron Condor entry points for options expiring in 1 week's time
Low risk (<2%) entry points
Buy Call:
Sell Call:
Buy Put:
Sell Put:
$3.24
$2.72
$0.90
$1.42
Medium risk (<10%) entry points
Buy Call
Sell Call
$2.54
Buy Put:
Sell Put:
$2.43
$1.59
$1.71
These entry points can be used for other strategies, such as butterflies, straddles, etc.
Risk-Adjusted returns (Sharpe Ratio) of
REAL
Sharpe Ratio:
-2.40%
Comparison:
REAL, is amongst the top 40% stocks with lowest risk-adjusted returns
Sharpe ratio is -376.42% lower than the industry
& is -205.24% lower than the market/S&P 500 average
Average Returns/Yield of
REAL
Daily returns:
-0.13%
Weekly returns:
-0.66%
Monthly returns:
-2.64%
Yearly returns:
12.13%
Comparison of returns:
Average annual returns/yield (last 3 years) is -361.52% below industry average
Classification:
REAL, is amongst the top 40% lowest yielding stocks in terms of daily returns
Results of T-Test of Returns:
0.52
Statistical test of Returns:
REAL has yielded returns statistically similar to the market
Volatility (measured by Standard Deviation)
Daily Volatility:
5.88%
Weekly Volatility:
13.14%
Monthly Volatility:
26.29%
Yearly Volatility:
91.06%
Volitlilty of last five days (Measured by Standard Deviation)
Average Volatility of this Week:
1.88%
Volatility in last five trading days has been -67.95% below long-term volatility
Value at Risk Analysis (VaR)
Daily VaR:
-12.20%
Weekly VaR:
-27.29%
Monthly VaR:
-54.58%
How Much Can the price of
REAL
Decline in a Recession?
Likely price decline in a recession:
Base case (decline):
-50%
Worst case (decline):
>85%
This translates to price declining to:
$1.04
This translates to price declining to:
$0.31
Severe Crash Probability
Risk of crash in next 6/12 months: Low (<25%)
What is Value at Risk (VaR)?
Risk Fundamentals
REAL is a 285.19% riskier investment compared to the market/S&P 500 & is 229.99% riskier than Nasdaq (IXIC)
Risk (measured by volatility) is 4.18% above industry average
Overall, it is amongst the top 50% most risky stocks
Beta Examination of
REAL
Beta in relation to market/S&P 500--1.95
Expected beta in 1 year's time:
1.078
Expected beta in 3 year's time:
1.525
Unlevered (debt free) Beta:
-0.262
Beta in relation to Nasdaq (XNAS):
0.917
Beta in relation to all global stocks::
1.05
Beta Comparison & Analysis
Beta of competitors/peers::
1.26
Beta is 55.08% higher than peers
Average Industry Beta:
1.644
Beta is 18.89% above industry average
Sustainable Growth Rate Analysis
Sustainable growth rate for this stock/firm:
-
-
Alpha provided | Alpha Analysis
Alpha provided:
-0.483
Alpha is 2015.33% above industry average alpha yield
Alpha is -3071% below the market average
Analysis of Cost of Capital of
REAL
Equity cost of capital:
0.165
Equity cost of capital is 14.76% above industry mean WACC
Unlevered (without debt) cost of capital:
-2.22%
Before-tax cost of debt:
3.45%
After-tax cost of debt:
2.73%
Overall debt rating:
High AA grade (second highest grade)
Weighted average cost of capital (WACC):
2.73%
WACC is -4.76% below industry mean WACC
Key Per-Share Metrics & Analysis
Revenue per share:
$5.40
Revenue growth rate per share of (3Y):
-2.85
Annual revenue growth rate is 86.35% above the industry average
EPS:
-$2.58
Expected Annual growth rate of EPS (3Y):
6.93%
Expected future EPS growth rate is -18.42% lower than the Luxury Goods industry
Free cash flow (FCF) per share:
-
-
-
Debt per share
$6.13
EBITDA per share
-$2.01
Valuation Analysis Today of
REAL
P/E Ratio:
-
P/E Ratio of Competitors/Peers:
17.73
-
-
REAL is -100.55% undervalued if valued using industry average P/E ratio
-
-
P/S (Price to Sales ratio):
0.38
Price to sales ratio is -69.35% below the industry mean
P/B (Price to book value ratio):
-2.85
-
-
Net income growth rate (3Y):
91.34%
Net income growth rate is -217.25% lower than the industry average net income growth rate
Dividend Analysis
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
Dividend History:
--$0.00
--$0.00
--$0.00
--$0.00
--$0.00
--$0.00
-
In-depth Debt & Leverage Analysis
Debt to equity ratio:
-845.20%
Net debt to equity ratio:
-352.55%
Debt to assets ratio:
83.88%
Net debt to assets ratio:
34.99%
Debt-to-asset ratio is 19.38% above industry average
Ability to repay debt:
Interest coverage ratio:
-9.19
Interest coverage ratio is -415.90% less than industry average
Looking forward:
Debt growth rate:
228.52%
Annual debt growth is 245% higher than industry average debt growth rate
Debt repayment rate in last quarter: 0.00%
Analysis of Key Statistics
Correlation of price movement with the market:
0.299
Statistical significance of correlation:
REAL has a statistically significant correlation with the market
Average Correlation of the industry with the market:
0.389
Stock price is -23.18% less correlated with the market compared to the industry average correlation
R Squared (percentage of price movement explained by movement of the market):
0.389
Correlation of price movement with Nasdaq (^IXIC):
-0.039
Covariance of price movement with the market:
-0.134
Kurtosis
2.555
Returns are, approximately, normally distributed (mesokurtic)
Skewness of returns:
-0.103
Returns are, approximately, symmetrical
Fundamental Analysis & Dupont Analysis of
REAL
Gross Profit Margin Ratio:
229%
Operating Profit Margin Ratio:
-42.06%
Operating profit margin is 313.23% higher than the industry
Net Profit Margin Ratio:
229%
Effective Tax Rate:
-0.01%
Effective tax rate is -100.03% lower than the industry
Dupont Method
Net Profit Margin
Return on Equity Ratio (ROE):
×
ROA
=
×
342.67%
Return on equity (ROE) is -1129.49% lower than the industry
Financial Leverage
Asset Turnover Ratio (ROA):
-34.01%
Return on assets (ROA) is 588.25% higher than the industry
Financial Leverage:
6.2x
Current Ratio:
2.58
Current ratio is 14.96% above industry average
Cash Conversion Cycle (days):
30.5
Cash conversion cycle is -59.19% below industry average
The remaining useful life of property plant & equipment is: 13.5 years
Stock based compensation to net income ratio:
-5.27%
In-depth Efficiency Analysis
Revenue generated per employee:
153.7K
Each employee generates -44% less revenue than industry average revenue per employee
EBITDA generated per employee:
- 57.3K
Each employee generates -375% less EBITDA than industry average revenue per employee
Profit generated per employee:
- 70.8K
Each employee generates -9261% less net income/profit than industry average revenue per employee
Free cash flow (FCF) generated per employee:
- 17.2K
Each employee generates 47% more free cash flow than industry average revenue per employee
Assets/Capital per employee
69.8K
Each employee generates 47% more free cash flow than industry average revenue per employee
Research & Development (R&D) Analysis
-
-
Competitors/Peer firms of
REAL
PURPLE INNOVATION, INC. (XNAS:PRPL)
DAVE & BUSTER'S ENTERTAINMENT, INC. (XNAS:PLAY)
CAVCO INDUSTRIES, INC. (XNAS:CVCO)
Smart Share Global Limited (XNAS:EM)
CANOO INC.. (XNAS:GOEV)
AMERICAN WOODMARK CORPORATION (XNAS:AMWD)
MONRO, INC. (XNAS:MNRO)
MALIBU BOATS, INC. (XNAS:MBUU)
Niu Technologies (XNAS:NIU)
Current Analyst Ratings
Strong buy�0%
Buy�0%
Hold�0%
Sell�0%
Strong sell�0%
Overall analyst sentiment is: -
Income Statement
Period:
TTM
Date:
3/31/22
Revenue:
515.58M
Cost of Revenue:
Gross Profit:
R&D Expense
General & Admin Expenses:
Selling, General & Admin Expenses
Sales and Marketing Expenses
Other Expenses :
Operating Expenses :
Cost & Expenses :
Interest Income:
Interest Expenses:
Depreciation & Amortization:
EBITDA:
Operating Income:
Other Income Expenses:
Income Before Tax:
Income Tax Expense:
Net Income:
Balance Sheet
Date:
Calendar Year:
Period:
Cash & Cash Equivalents:
Short Term Investments:
Cash & Short Term Investments:
Net Receivables:
Inventory:
Other Current Assets:
Total Current Assets:
PP&E:
Goodwill:
Intangible Assets:
Long Term Investments:
Tax Assets:
Other Non-Current Assets:
Total Non-Current Assets:
Other Assets:
Total Assets:
Accounts Payable:
Short Term Debt:
Tax Payables:
Deferred Revenue:
Other Current Liabilities:
Total Current Liabilities:
Long Term Debt:
Other Non-Current Liabilities:
Total Non Current Liabilities:
Other Liabilities:
Total Liabilities:
Common Stock:
Retained Earnings:
Accumulated Other Comprehensive Loss:
Other Total Stockholders' Equity:
Total Stockholders' Equity:
Total Liabilities and Stockholders' Equity:
Total Investments:
Total Debt:
Net Debt:
221.82M
293.76M
-
432.35M
497.50M
65.15M
-
497.50M
376.00K
20.90M
24.46M
- 192139.00K
- 216842.00K
- 237526.00K
- 237498.00K
28.00K
- 237526.00K
Statement of Cash Flow
Date:
Period:
6.36M
Differed Income Tax :
-
Stock Based Compensation :
12.51M
Change in Working Capital :
- 17201.00K
Accounts Receivables:
- 602.00K
Other Working Capital:
-
Other Non-Cash Items:
6.38M
Net Cash Provided by Operating Activities:
- 49354.00K
Investments in PP&E:
- 5143.00K
Net Acquisitions:
-
Purchases of Investments:
-
Sales/Maturities of Investments:
Other Investing Activities:
Net Cash Used for Investing Activities:
Debt Repayment:
Common Stock Issued:
Common Stock Repurchased:
Dividend Paid:
Other Financing Activities:
Net Cash Used Provided by Financing Activities:
Effect of FOREX on Changes in Cash:
Net Changes in Cash:
Cash at End of Period:
Cash at Beginning of Period:
Operating Cash Flow:
Capital Expenditure:
Free Cash Flow (FCF):
3/31/22
2022
Q1
361.01M
-
361.01M
8.18M
73.70M
21.38M
464.26M
230.91M
-
-
-
-
3.27M
234.17M
-
698.43M
6.29M
19.52M
8.34M
3.29M
150.68M
179.79M
585.87M
2.10M
587.97M
-
767.75M
1.00K
- 812120.00K
-
-
March 31, 2022 at 6:00:00 AM
719.32M
- 69317.00K
698.43M
-
605.39M
244.4M
-
- 3304.00K
- 8447.00K
-
-
-
-
637.00K
637.00K
-
- 57164.00K
361.01M
418.17M
- 49354.00K
- 8447.00K
- 57801.00K
Our Proprietary Portfolio Rating
Our Rating:
D
Price Forecast/Expected Price in Next 5 Years of
REAL
2023
2024
2025
2026
2027
$2.35
$2.66
$3.00
$3.40
$3.85