Rent The Runway (RENT): The New Standard for Designer Fashion


The global economy is resurfacing from the depths of the pandemic with a digitized ambition unlike any we have seen before as we enter the 4th Industrial Revolution.

Social gatherings / events are back and attendees are looking to break out of their locking holes with a diverse fashionable feel that Rent The Runway’s digital niche RENT offering can deliver. This subscription platform offers women a wide assortment of the latest designer trends, which can be “rented” for upcoming events.

With a slew of holiday celebrations and post-COVID social outings on the horizon, RENT is poised to explode as society enters a new digital-driven normal.

Rent The Runway (RENT) immediately plunged from its IPO price last month and continues to slump (now trading 30% below its IPO price of $ 23), creating a great opportunity for us to step into this burgeoning digital retail niche of the future before it takes off. Several leading analysts have released very bullish initiation reports on RENT in the past 48 hours, with price targets ranging from $ 20 to $ 28 (representing a 25% to 75% increase). Every hedging analyst calls the stock a buy today.

This signal of confidence from some of the most trusted sell-side analysts should give this stock the green light it needs for deep pocket fund managers to start buying this still small-cap stock.

Most fund managers didn’t initially understand this emerging trend in women’s fashion, and the drop in COVID-related subscriptions from a growth-driven tech company is a red flag for those who fail to recognize the value proposition of this new generation. retail platform offerings.

RENT to publish its first results report as a state-owned company after the bell on Wednesday, December 8e, which should generate some nice sling price action if RENT reveals the story of continued growth in margin-improving subscriptions it has presented following the pandemic lockdown trough.

Rent The Runway is emerging from this pandemic with expanding operational improvements and customer retention that it had not been able to achieve before. The number of active subscribers nearly doubled in the first half of 2021 to reach 97,614 at the end of July, even less than the 133,576 it had before the pandemic. However, with operating margins close to profitability and an obvious acceleration in growth, RENT is a bargain at the 5x forward selling price it is trading at.

It’s time to invest in the new normal. RENT is perfectly positioned for the digital revival of the company, and its under-the-radar profile makes this growth-oriented title a valuable game today.

Have a good negotiation!

Dan

For more stock-powered information and trading, check out my Headline Trader Portfolio Daily Market Commentary.

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.


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