Shares of Rent the Runway increased by 15%
2022.12.08 07:14
Shares of Rent the Runway increased by 15%
Budrigannews.com – Rent the Runway shares (NASDAQ:) are up more than 15% in pre-open trading on Thursday following the company’s increase in its full-year forecast.
Rent the Runway reported a loss per share of $0.56 on sales of $77.4 million, which is higher than the average analyst estimate of $0.71 on sales of $73.3 million. For FY2023, Rent the Runway raised its revenue forecast to $293-295 million from $285-290 million, which was higher than the estimate of $288.3 million. Following the Q3 earnings report, the company stated that its restructuring plan is “now substantially complete.”
The outcomes, according to Wells Fargo analysts, suggest Rent’s business is stabilizing. “A show-me story, encouraged by improving stability and increasing margin progress,” however, RENT stock remains.
“Net/net, shares are likely to remain a show-me story in NT, despite our optimism regarding RENT’s recovery and increased visibility into margins. In a client note, the analysts stated, “We reiterate our bullish stance on the business and the ability of the model to scale with secular top-line tailwinds (shift to ecomm, consumer quest for value, etc.) as well as recovery from COVID (return to work, events, etc.”
Analysts at Goldman Sachs wrote that RENT was able to increase margins after the restructuring was nearly finished. They reaffirmed their Buy rating and $6 PT.
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“We see execution (in terms of fiscal year exit velocity) on the restructuring initiatives and a return to more visible linear subscriber trends (even if a mix of growth and seasonality) as key to investor debates over the next year,” the statement reads. The analysts wrote, “Over the long term, we continue to see RENT as the leader in the subscription-based effort to drive the adoption of the sharing economy theme in the apparel sector.”
