Rent the Runway(RENT) ZACKS·2024-10-23 17:01Core Viewpoint - Rent the Runway, Inc. (RENT) has been upgraded to a Zacks Rank 1 (Strong Buy), indicating a positive outlook on its earnings estimates, which is a significant factor influencing stock prices [1][2]. Earnings Outlook - The Zacks Consensus Estimate for Rent the Runway indicates an expected loss of -$19.08 per share for the fiscal year ending January 2025, reflecting a year-over-year change of 40.2% [5]. - Over the past three months, analysts have raised their earnings estimates for Rent the Runway by 14.1% [5]. Impact of Earnings Estimates - Changes in a company's future earnings potential, as shown through earnings estimate revisions, are strongly correlated with near-term stock price movements [3]. - Institutional investors utilize earnings estimates to determine the fair value of a company's shares, which influences their buying and selling actions, subsequently affecting stock prices [3]. Zacks Rating System - The Zacks Rank stock-rating system classifies stocks into five groups based on earnings estimates, with Zacks Rank 1 stocks historically generating an average annual return of +25% since 1988 [4]. - The upgrade of Rent the Runway to Zacks Rank 1 places it in the top 5% of Zacks-covered stocks, suggesting a strong potential for price appreciation in the near term [6].