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ZYBERNO

Stock Report

Updated Sep 1, 2026

TheRealReal, Inc. (REAL)

Consumer Discretionary • NASDAQ

$10.93

Professional Investment Analysis

ZYBERNO SCORE →

Is it a great business? Is it getting better?

25.0/100

POOR BUSINESS

TheRealReal, Inc. (REAL) scores 25/100 — concerning metrics indicating significant structural or financial risks.

📊 How is the Zyberno Score calculated? +

The Zyberno Score answers one question: "Is this a quality business worth owning?" It's a 0-100 investment grade that evaluates business fundamentals across four critical dimensions, based on principles from Warren Buffett, Benjamin Graham, Peter Lynch, and Charlie Munger.

The 4 Core Categories (25 points each):

1. PROFITABILITY (25 pts)

Metrics: ROE, ROIC, Net Margin, Operating Margin
Thresholds: ROE >20% excellent • ROIC >20% excellent • Net Margin >20% excellent • Operating Margin >25% excellent

2. FINANCIAL STRENGTH (25 pts)

Metrics: Debt-to-Equity, Current Ratio, Interest Coverage, Altman Z-Score
Thresholds: D/E <0.3 excellent • Current Ratio >2.5 excellent • Interest Coverage >10x excellent • Altman Z >3.0 safe

3. CASH FLOW QUALITY (25 pts)

Metrics: Free Cash Flow, OCF vs Net Income, FCF Margin
Thresholds: Positive & growing FCF excellent • OCF/NI >1.2x excellent (cash earnings exceed accounting)

4. GROWTH & CONSISTENCY (25 pts)

Metrics: Revenue Growth, Net Income Growth, FCF Growth, Piotroski F-Score
Thresholds: Growth via log-linear regression • Piotroski 8-9 excellent, 6-7 good

Score Interpretation:

75-100

GREAT BUSINESS

65-74

GOOD BUSINESS

50-64

AVERAGE BUSINESS

30-49

WEAK BUSINESS

0-29

POOR BUSINESS

→ View full REAL quality analysis & detailed breakdown

VALUATION SIGNAL

MARGIN OF SAFETY

Is this stock cheap or expensive relative to what the business has historically generated for owners?

-56.0%

Overvalued

Growth gap unavailable — insufficient data for reverse DCF calculation.

🎯 Expected Annual Return →

9.8%

Margin of Safety convergence — your return if the market re-prices to intrinsic value (5-yr annualised)

-3.5%

Yield + growth — what the business alone earns you, even if the market never re-rates

💰 How is Margin of Safety calculated? +

Margin of Safety measures how much discount or premium you're paying relative to a stock's intrinsic value. It's Benjamin Graham's core principle: the larger the margin, the lower your downside risk.

Formula: (Intrinsic Value − Current Price) ÷ Intrinsic Value × 100%

How We Calculate Intrinsic Value (DCF Method):

Step 1: Calculate current Owner Earnings (OCF − Maintenance CapEx)

Step 2: Calculate company-specific growth rate using log-linear regression on 16 quarters of Owner Earnings

Step 3: Project 10 years forward using the calculated growth rate

Step 4: Discount each year's cash flow to present value using 10% discount rate

Step 5: Calculate terminal value using 3% perpetual growth rate

Step 6: Sum all discounted cash flows = Intrinsic Value

What The Percentages Mean:

+50% or more

EXCELLENT — Very undervalued

+25% to +50%

GOOD — Attractive discount

0% to +25%

FAIR — Reasonable value

0% to -25%

CAUTION — Slight premium

-25% or worse

POOR — Overvalued

"Price is what you pay, value is what you get." — Warren Buffett

→ View full REAL valuation analysis · → View full REAL Brina Gap analysis

📈 How is Brina Gap calculated? +

Brina Gap measures the difference between the growth a business can fundamentally sustain and the growth the market is already pricing in.

Formula: Fundamental Growth Rate − Market-Implied Growth Rate

The Two Components:

Fundamental Growth Rate = ROIC × Reinvestment Rate

What the business can sustainably grow at based on how much it reinvests and what return it earns on that capital. Grounded in historical financials.

Market-Implied Growth Rate = Reverse DCF

The growth rate the current Enterprise Value implicitly assumes. Calculated by back-solving a 10-year DCF model (10% WACC, 3% terminal growth) until the present value of projected cash flows equals EV.

What The Gap Means:

Gap > +5% Market Underestimates — potential upside

+2% to +5% Slight Underestimate

-2% to +2% Fairly Priced — market consensus matches fundamentals

-5% to -2% Slight Overestimate

Gap < -5% Market Overestimates — price embeds optimism fundamentals don't support

A positive gap (market underestimates) combined with a positive Margin of Safety is the strongest combined signal — the business is both cheap historically and forward economics are stronger than the price suggests.

Critical Financial Health Indicators

Return on Equity (Profitability):CRITICAL (0.0%)

Debt-to-Equity (Solvency Risk):EXCELLENT (0.00x)

Operating Margin (Operational Efficiency):CRITICAL (-3.8%)

Return on Capital (Capital Efficiency):CRITICAL (-8.2%)

📊 Valuation Trilogy

Three interconnected metrics for complete valuation analysis

Click any metric for full methodology and detailed analysis

Zyberno's Verdict

TheRealReal, Inc. (REAL) stock report — Zyberno Score 25/100 (POOR BUSINESS), Margin of Safety -56.0%, 10% expected annual return. Full financial analysis on Zyberno.

According to Zyberno's DCF model, TheRealReal, Inc. (REAL) trades at $10.93 against an estimated intrinsic value per share of $7.01 — a -56.0% Margin of Safety based on Owner Earnings of $27.26M TTM, projected at 100.0% growth for 10 years with a 2.5% terminal growth rate. Zyberno's model translates this into a 5-year expected return of 9.8% annually.

Over the trailing twelve months, REAL generated $27.26M in Owner Earnings. Capital was deployed as follows: $21.40M invested in capital expenditures. Reinvestment rate: 67.2%. Owner Earnings have grown at 100.0% annually over the trailing five years using log-linear regression.

DIVISION I: EXECUTIVE SUMMARY

A. Market Valuation

Market Price & Capitalization (2)

Current Price:10.93

Market Cap:$1.32B

Valuation Multiples (2)

P/S Ratio:1.76x

Peg Ratio:-999.00x

Enterprise Metrics (3)

Enterprise Value:$1.37B

Ev Ebitda Ratio:362.38x

Pfcf Ratio:48.53x

Price Action & Momentum (3)

12-1 Momentum:

+43.3% (95th pctile)

📈 Click to view full REAL Momentum analysis →

Momentum Percentile:95 / 100

% of 52-Week High:62.8%

B. Profitability Assessment

Return Metrics (4)

ROA:-21.1%

Roic:

-8.2%

📊 Click to view full REAL ROIC analysis →

Reinvestment Rate:67.2%

Fundamental Growth Rate (g):-5.5%

Margin Analysis (3)

Operating Margin Ttm:-3.8%

Net Margin Ttm:-10.8%

Ebitda Margin:0.5%

TTM Performance (3)

Gross Margin Ttm:74.5%

Operating Margin Ttm:-3.8%

Net Margin Ttm:-10.8%

Yield Metrics (3)

Earnings Yield:-$9.15

Owner Earnings Yield:$2.06

Dividend Yield:0.0%

C. Log-Linear Regression Growth Trends

Earnings Surprise (SUE) (3)

Earnings Surprise (SUE):

-0.85

📊 Click to view full REAL Earnings Surprise analysis →

EPS Surprise vs Expected:-545.6%

Latest Earnings Filed:2026-08-06

Revenue Growth (Linear) (1)

Revenue Growth Rate (Linear):9.4%

Cash Flow Growth (Linear) (2)

Free Cash Flow Growth Rate (Linear):100.0%

Operating Cash Flow Growth Rate (Linear):100.0%

D. Financial Stability

Liquidity Ratios (3)

Current Ratio:0.83x

Quick Ratio:0.68x

Cash Ratio:0.51x

Leverage Analysis (1)

Debt To Ebitda:43.61x

Coverage Ratios (2)

Interest Coverage Ratio:-0.83x

Times Interest Earned:-0.83

Capital Structure (4)

Working Capital:-40,162,000.00

Cash And Cash Equivalents:119,132,000.00

Long Term Debt:$64.40M

Net Debt:$45.55M

DIVISION II: FINANCIAL STATEMENTS ANALYSIS

A. Income Statement Analysis

Revenue Components (2)

Revenue TTM: $749.91M

Linear Growth: 9.4%

📊 Click to view full REAL Revenue analysis & methodology →

Cost Of Revenue Ttm:$191.25M

Profitability Breakdown (2)

Gross profit TTM: $558.66M

Linear Growth: 15.5%

📊 Click to view full REAL Gross Profit analysis & methodology →

-$28.49M

Bottom Line Performance (3)

-$81.13M

Income Before Tax:-$80.74M

Ebitda Ttm:3,776,000.00

Operating Expenses (5)

Operating Expenses:564,494,000.00

R And D Expense:0.00

Sga Expense:208,330,000.00

Income Tax Expense:$388.00K

Interest Expense:28,886,000.00

Expense Ratios (3)

R And D To Revenue Percentage:0.0%

Sga To Revenue Percentage:108.2%

Ebitda Margin:0.5%

B. Balance Sheet Analysis

Asset Composition (5)

Total Assets:$378.29M

Current Assets:$193.32M

Ppe Net:100,558,000.00

Goodwill:0.00

Intangible Assets:$0.00

Liability Structure (4)

Total Liabilities:756,017,000.00

Current Liabilities:233,480,000.00

Long Term Debt:$64.40M

Short Term Debt:$100.27M

Equity & Capital (3)

Equity:-$377.73M

Retained Earnings:-$1.28B

Common Stock:500,000,000.00

Working Capital Items (3)

Accounts Receivable:20,073,000.00

Inventory:35,431,000.00

Accounts Payable:95,062,000.00

Special Items (2)

Contract Liabilities:7,295,000.00

Stock Based Compensation:7,575,000.00

C. Cash Flow Analysis

Operating Activities (2)

Operating cash flow TTM: $48.66M

Linear Growth: 100.0%

Free cash flow TTM: $27.26M

Linear Growth: 100.0%

📊 Click to view full REAL Free Cash Flow analysis & methodology →

Investment Activities (2)

Investing Cash Flow:-$10.64M

Capital Expenditures Ttm:21,402,000.00

Financing Activities (3)

Financing Cash Flow:-$16.00K

Dividends Paid Ttm:0.00

Stock Repurchase:0.00

Capital Transactions (3)

Common Stock Issuance:0.00

Long Term Debt Issuance:$0.00

Long Term Debt Repayments:$0.00

Non-Cash Items (1)

Depreciation Amortization Ttm:32,267,000.00

DIVISION III: OPERATIONAL METRICS

A. Per Share Analysis

Earnings Per Share (3)

EPS (Basic TTM):-0.72

-$1.00

Earnings Per Share Ttm:-$0.67

Revenue & Cash Per Share (3)

Sales Per Share Ttm:6.20

Operating Cash Flow Per Share:$0.31

Fcf Per Share Ttm:0.23

Book Value & Capital (2)

Book Value Per Share:-$3.12

Cash Per Share:0.98

Dividend Policy (1)

Dividend Payout Ratio:-999.00x

B. Operational Efficiency

Asset Utilization (2)

Asset Turnover Ttm:1.95x

Working Capital Turnover Ttm:-999.00x

Receivables Management (2)

Receivables Turnover Ttm:37.36x

Days Sales Outstanding Ttm:9.77

Inventory Management (2)

Inventory Turnover Ttm:5.40x

Days Inventory Outstanding Ttm:67.62

Payables & Cash Cycle (2)

Days Payable Outstanding:181.42

Cash Conversion Cycle:-104.03

C. Quality & Risk Metrics

Financial Quality Scores (2)

Financial Strength Score:20.00

Quality Score:30.00

Market Metrics (2)

Beta:0.00x

Volatility Category:unknown

DIVISION IV: INVESTMENT ANALYSIS

A. Value Investment Framework

Owner Earnings Analysis (3)

Owner earnings TTM: $27.26M

Linear Growth: 100.0%

📊 Click to view full REAL Owner Earnings analysis & methodology →

Owner Earnings Per Share:$0.23

Owner Earnings Yield:$2.06

Growth Assessment (1)

Owner Earnings Growth Rate:$100.00

Damodaran Growth Analysis (2)

Reinvestment Rate:67.2%

Fundamental Growth Rate (g):-5.5%

Intrinsic Value Models (1)

Intrinsic Value:

$848.11M

📊 Click to view full REAL DCF valuation →

Margin of Safety (1)

Margin Of Safety:

-56.0%

📊 Click to view full REAL valuation analysis →

Return Scenarios (2)

Theoretical 5-Year Return:

9.8%

📊 Click to view full REAL expected return analysis →

Forward Expected Return (Yield + Growth):

-3.5%

📊 Click to view full REAL expected return analysis →

Investment Assessment (1)

Buffett Assessment:Overvalued

B. Log-Linear Regression Growth Analysis

Growth Rates (Log-Linear Regression) (1)

Revenue Growth Rate (Linear):9.4%

Cash Flow Growth Rates (2)

Free Cash Flow Growth Rate (Linear):100.0%

Operating Cash Flow Growth Rate (Linear):100.0%

Other Growth Rates (2)

Gross Profit Growth Rate (Linear):15.5%

Owner Earnings Growth Rate:$100.00

C. Company Profile & Context

Corporate Information (6)

Symbol:REAL

Company Name:TheRealReal, Inc.

Sector:Consumer Discretionary

Industry:Retail-Miscellaneous Retail

Exchange:NASDAQ

Country:United States

Market Classification (3)

Market Cap Category:N/A

Price Category:medium

Volume Category:N/A

Share Structure (3)

Shares Outstanding:121.02M

Shares Outstanding Basic:121.02M

Shares Outstanding Diluted:121.02M

Data Processing Info (3)

Processing Version:v3.0

Last Updated:2026-09-01 00:05:05 UTC

Data Timestamp:2026-09-01T00:05:05.770323