• RENT reported an earnings per share of $13.65, significantly outperforming expectations.
• The company saw a 15.4% rise in revenue, reaching $87.6 million.
• Despite a low P/E ratio, RENT's stock appears undervalued, with a price-to-earnings (P/E) ratio of 3.50.

Rent the Runway, Inc. (NASDAQ:RENT) is a fashion company that offers clothing and accessory rentals. It aims to transform how women dress by providing access to designer fashion without the need to purchase. The company competes with other fashion rental services and traditional retail stores. RENT's recent financial performance has been noteworthy, with significant earnings and revenue growth.

On December 12, 2025, RENT reported an impressive earnings per share of $13.65, far exceeding the expected loss of $4.87. This strong performance is supported by a 15.4% rise in revenue, reaching $87.6 million, surpassing the anticipated $73.8 million. The company's strategic initiatives, including a transformative recapitalization plan, have strengthened its financial position by reducing debt and extending its maturity to 2029.

RENT's community-driven organic growth strategy has led to a 12.4% year-over-year increase in active subscribers. This approach, along with the largest inventory investment in its history, aims to boost brand awareness and customer acquisition. The company's multi-year transformation plan continues to support its innovation in the fashion industry, reinforcing its market position.

Despite a low price-to-earnings (P/E) ratio of 3.50, RENT's stock appears undervalued relative to its earnings. The price-to-sales ratio of 0.08 and enterprise value to sales ratio of 0.06 further indicate a low valuation compared to sales. However, the enterprise value to operating cash flow ratio of -8.11 suggests challenges in generating positive cash flow from operations.

The company's debt-to-equity ratio of -1.21 indicates more liabilities than equity, which could concern investors. Additionally, the current ratio of 0.97 suggests that RENT has slightly less than enough current assets to cover its current liabilities. Despite these challenges, the earnings yield of 28.53% highlights the company's ability to generate significant earnings relative to its share price.