Why The RealReal Stock Soared Today

Shares of The RealReal (NASDAQ: REAL) surged on Tuesday after the online marketplace for luxury goods delivered robust third-quarter financial results and boosted its full-year sales forecast.

As of 1:35 p.m. ET, The RealReal's stock price is up more than 35%.

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The luxury resale market is booming

In today's challenging economic environment, even buyers of high-end merchandise are seeking bargains -- and these shoppers are increasingly turning to The RealReal's marketplaces to find them.

The company's gross merchandise value -- the total dollar value of all transactions conducted on its platform -- grew by 20% year over year to $520 million. Active buyers increased 7% to over 1 million, while the average order value rose 12% to $584.

The RealReal's revenue, in turn, climbed 17% to $174 million.

Moreover, the luxury goods reseller's profitability is improving as it scales its platform. Its adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) quadrupled to $9.3 million, or 5.4% of revenue, up from 1.6% in the third quarter of 2024.

The RealReal sees plenty of room for expansion

These strong results and encouraging ongoing sales trends prompted management to lift its full-year sales and earnings outlook. The company now expects revenue of $687 million to $690 million and adjusted EBITDA of $37.7 million to $38.7 million in 2025.

"We are at the leading edge of a growing industry, which fuels our ability to shape the evolution of luxury resale and drive sustained profitable growth," CEO Rati Levesque said.

Joe Tenebruso has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.