Is The RealReal (REAL) a Worthy Investment?

2 weeks ago 8

Soumya Eswaran

Fri, April 17, 2026 astatine 10:04 AM CDT 4 min read

Michigan-based concern advisor Cedar Grove Capital Management precocious released its archetypal 4th 2026 capitalist letter. A transcript of the missive tin beryllium downloaded here. Cedar Grove Capital Management’s Multi-Strategy Composite posted a -23.0% nett instrumentality since inception, compared to -5.6% for the Russell 2000, -5.9% for the Russell Microcap, and -5.5% for the S&P 500. Timing is cardinal for aboriginal money success, yet predicting outer shocks during volatile macroeconomic periods is impossible. Rather than speculate connected macro risks, it’s advisable to put successful beardown companies astatine tenable prices with bully maturation prospects. The caller downturn, called a "SaaS apocalypse," was an accidental to bargain prime stocks that were undervalued contempt amended fundamentals and imaginable AI-driven gains. In February and aboriginal March, astir each portfolio holdings reported beardown earnings. However, the outbreak of warfare successful Iran rapidly overshadowed these gains, causing a accelerated marketplace selloff. While macro factors wounded show successful Q1, the steadfast is assured that its companies volition bash good successful Q2 and beyond. In addition, delight cheque the Strategy’s apical 5 holdings to cognize its champion picks successful 2026.

In its first-quarter 2026 capitalist letter, Cedar Grove Capital Management highlighted stocks specified arsenic The RealReal, Inc. (NASDAQ:REAL). The RealReal, Inc. (NASDAQ:REAL) is simply a starring online marketplace for the resale of luxury goods. The one-month instrumentality of The RealReal, Inc. (NASDAQ:REAL) was 42.30%, and its shares gained 128.53% of their worth implicit the past 52 weeks. On April 16, 2026, The RealReal, Inc. (NASDAQ:REAL) banal closed astatine $11.33 per share, with a marketplace capitalization of $1.45 billion.

Cedar Grove Capital Management stated the pursuing regarding The RealReal, Inc. (NASDAQ:REAL) successful its Q1 2026 capitalist letter:

"The RealReal, Inc. (NASDAQ:REAL): The RealReal is simply a home omnichannel luxury resale retailer that is capitalizing connected the second-hand manner question that is taking the U.S. by storm. While galore investors are disquieted astir accepted luxury retailers facing assorted headwinds (LVMH conscionable had their worst twelvemonth since the GFC), and the worth oriented user getting squeezed from the other end, REAL gets misunderstood arsenic falling into 1 oregon some of those categories. We consciousness similar this knowing is incorrect, and REAL operates successful its ain unsocial class (second-hand luxury) that is increasing astir doubly arsenic accelerated arsenic regular luxury (11.6% vs 5.2%).

Even though REAL operates successful its ain category, the company’s concern exemplary lone works if it’s capable to grow its proviso successful bid to thrust much demand. A delicate equilibrium betwixt the two. REAL has already done good to unlock further proviso from customers crossed the state (tariff-free), which has driven higher gross merchandise worth (GMV), revenue, and adjusted EBITDA. With the assistance of AI being capable to summation passim for merchandise authentications and listings, operating leverage has started to show. The institution is erstwhile again guiding for a double-digit topline maturation twelvemonth with ~200bps of adjusted EBITDA borderline enlargement successful FY’26. With beardown tailwinds, maturation successful GMV, and borderline expansion, REAL should beryllium capable to capitalize connected the monolithic user displacement to second-hand merchandise and the benefits of AI."

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