The RealReal, Inc. — Earnings Quality Grade F
REAL · Consumer Cyclical
Major red flags
Screening Summary
Management Signals
Financial Trends
Revenue & Net Income ($B)
Margins (%)
18-Point Screening
Revenue Quality
DSO 13 days, change +4 days YoY
AR growth 70.6% exceeds revenue growth 15.4%
Revenue 15.4%, CFFO 37.9%. Cash follows revenue
Expense Quality
Inventory growth 30.8% exceeds COGS 15.1%
CapEx growth 21.1% vs revenue 15.4%. Normal
SG&A/Gross Profit = 51.2%. Normal
Gross margin 74.6%, change +0.1pp. Stable
Cash Flow Quality
CFFO < Net Income for 3 consecutive years
Small-cap context: Small-cap CFFO/NI often diverges from working-capital swings, not necessarily manipulation.
FCF $0.0B, FCF/NI = -0.13
Accruals ratio = -19.3%. Low accruals
Cash $0.2B covers only 33% of debt $0.5B
Balance Sheet Health
No goodwill. Clean balance sheet
Debt/EBITDA = 24.0x (>4x). Interest coverage = -0.9x (<2x). Financial stress
Other assets 2.4% vs revenue 15.4%. Normal
No write-off data
Acquisition Risk
FCF after acquisitions positive
No goodwill
Manipulation Score
M-Score = -2.77 (< -2.22). Unlikely manipulator
Portfolio monitoring
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Beneish M-Score
Altman Z-Score
Generated from public financial data using forensic accounting frameworks. Not investment advice. Data: Yahoo Finance · 2026-04-25