RENT

Rent the Runway looks absurdly cheap on the headline screen — 1.7 P/E, 0.9 P/S, a $37.8M market cap against $43.8M of revenue — but the inputs are poisoned. The $22.6M net income (a 51.6% 'net margin,' +132% YoY) is not operating profit: operating income was -$57.5M, a -131% operating margin that actually deteriorated 21% YoY. The wedge between a $57.5M operating loss and a $22.6M reported profit is non-operating and one-time — overwhelmingly the October 28, 2025 Recapitalization Transactions, which cut long-term debt from $333.7M to $156.6M. The $1.88 EPS and 1.7 P/E are artifacts of debt forgiveness, not earnings you can capitalize. Underneath, this firm has lost money every year shown (FY22 -$212M through FY25 -$70M) and carries a $1.10B accumulated deficit.

The balance sheet is broken. Stockholders' equity is -$36.1M — the company owes more than it owns, which is why liabilities/equity prints a meaningless -7.12x. PwC attached an Emphasis of Matter flagging recurring operating losses and accumulated deficit, i.e. going-concern language. Cash fell 34.9% to $50.4M, operating cash flow collapsed 73% to a barely-positive $3.5M, and the recap diluted share count 201% in a single year — existing holders were largely wiped to keep the lights on.