Rent the Runway, Inc.

Where It Passes

Where It Falls Short

• Growth0% pass✓ 2✗ 11▾

  No clean pass — all 8 investors flag at least one growth criterion

  EPS Growth (3-yr avg, 10-yr window)

  ✗Graham>= 33% growth

  Basic earnings-growth PEG (dividends excluded)P/E 1.2x (growth N/A)

  ✗Lynch< 1.0 (ideally < 0.5)

  3-5 Year EPS CAGR

  ✗Lynch15-30% (Fast Grower); > 0% to pass

  Inventory Growth vs Revenue GrowthN/A (no inventory)

  ✓LynchInventory growth < Revenue growth

  EPS Growth Direction

  ✗DremanPositive over recent years

  EPS CAGR

  ✗Dreman> 5% annualized

  Positive Net Income Frequency1/7 years positive

  ✗MarksPositive net income in >= 7 of last 10 years

  3yr Median Revenue Growth2.7%

  ✗Ackman>= 5%

  Positive EPS Growth Frequency

  ✗AckmanPositive EPS growth in >= 3 of last 5 years

  5-Year EPS CAGR

  ✗Templeton> 0% (5-year EPS CAGR)

  Revenue growth vs. gross and operating margin trendgross margin 71.2% -> 73.2%, operating margin -26.8% -> -17.4%

  ✗SleepRevenue rising; gross margin flat or falling; operating margin holding

  5-year Revenue CAGR15.9%

  ✓SleepCAGR > 7%

  3-5 Year Diluted EPS CAGR

  ✗Neff7%-20% annualized
• Efficiency0% pass✓ 1✗ 10▾

  No clean pass — all 8 investors flag at least one efficiency criterion

  Current Ratio0.67

  ✗Graham>= 2.0

  ROIC (3-5 yr avg)-79.1%

  ✗Buffett> 10%

  ROIC - WACC-89.1%

  ✗BuffettPositive (WACC = 10%)

  EBIT / (NWC + Net Fixed Assets)N/A (invested capital <= 0)

  ✗Greenblatt> 25%

  Current Ratio Change YoY1.98 -> 1.06

  ✗PiotroskiIncreased YoY

  Revenue / Total Assets Change YoY1.28x -> 1.49x

  ✓PiotroskiImproved YoY

  Current Assets / Current Liabilities0.67

  ✗Dreman> 1.5

  Return on Invested Capital-38.8%

  ✗Munger> 15%

  ROIC (high and growing)FY2023: ROIC=-34.3%; FY2024: ROIC=-24.8%; FY2025: ROIC=-37.7%

  ✗AkreLatest 3 consecutive FYs: ROIC > 15% in each

  Reinvestment Rate x ROIC-37.7% (RR=100% x ROIC=-37.7%)

  ✗AkreReinvestment Rate * ROIC > 10%

  ROIC (5-year)0/5 years above 12% (latest -37.7%)

  ✗SleepROIC > 12% in a majority of years
• Debt & Leverage8% pass✓ 1✗ 14▾

  11 of 12 flag RENT's debt & leverage — Graham, Buffett, Lynch +8 more

  LT Debt vs Net Current AssetsLT Debt $157.5M vs NCA $-21.6M

  ✗GrahamLT Debt <= Net Current Assets

  Debt/Equity & Interest CoverageD/E: N/A (negative equity), IC: N/A

  ✗BuffettD/E < 0.5 AND Interest Coverage > 5x

  Total Debt / EquityN/A (negative equity)

  ✗Lynch< 0.33

  Cash - Long-term Debt$-128.5M

  ✗LynchPositive preferred

  LT Debt / Total Assets Change139.04% -> 70.86%

  ✓PiotroskiDecreased YoY

  Current Assets / Current Liabilities0.67

  ✗Dreman> 1.5✗SchlossCurrent ratio >= 1.50x (app cutoff)

  Total Debt / Shareholders' Equity

  ✗Dreman< 0.8✗Templeton< 1.0 (fixed cap; proxy for below-sector-median leverage)✗SchlossD/E < 1.00x

  Debt LevelsN/A (non-positive equity)

  ✗MungerDebt/Equity < 0.5✗AkreDebt/Equity < 0.3

  Interest Coverage & Debt/EBITDA

  ✗MarksInterest Coverage > 3x; Debt/EBITDA < 4x

  Total Debt / Shareholders Equity

  ✗Ackman<= 1.0

  Negative debt-to-equity (higher means less debt)

  ✗AsnessTop 30% of eligible cross-section
• Verdicts8% pass✓ 1✗ 11▾

  Split decision: 11 FAIL · 4 NEUTRAL · 1 PASS

  Overall verdict

  ✗GrahamFAIL (1/9)✗BuffettFAIL (1/9)✗LynchFAIL (1/7)•GreenblattNot ranked•PiotroskiNEUTRAL (F-Score 6)✗DremanFAIL (3/11)✓MungerPASS (2/4)•PabraiNEUTRAL (2/3)✗AkreFAIL (0/6)✗MarksFAIL (1/5)✗AckmanFAIL (1/9)✗TempletonFAIL (3/8)✗SleepFAIL (1/6)•AsnessNEUTRAL (Not ranked)✗NeffFAIL (2/6)✗SchlossFAIL (0/7)•OshaughnessyNEUTRAL (Not ranked)
• Profitability13% pass✓ 10✗ 25▾

  14 of 16 flag RENT's profitability — Graham, Buffett, Lynch +11 more

  Positive EPS (10 years)1/8 years positive

  ✗GrahamPositive EPS every year for 10 years

  EPS Growth (3-yr avg, 10-yr window)

  ✗Graham>= 33% growth

  Net Income Positive (10+ years)1/8 years positive

  ✗BuffettPositive every year for 10+ years

  ROE (up to 5-year arithmetic mean)-297.9%

  ✗Buffett> 15% arithmetic mean (app rule)

  Operating Margin (10-yr trend)-17.4% (latest)

  ✓BuffettStable or rising over 10 years

  Free Cash Flow Proxy

  ✗BuffettPositive and growing

  Earnings Variance (10-yr CoV)

  ✗BuffettCoV < 0.3

  Retained Earnings Effectiveness

  ✗Buffett$1 retained -> > $1 market value created

  Basic earnings-growth PEG (dividends excluded)P/E 1.2x (growth N/A)

  ✗Lynch< 1.0 (ideally < 0.5)

  3-5 Year EPS CAGR

  ✗Lynch15-30% (Fast Grower); > 0% to pass

  ROEN/A (negative equity)

  ✗Lynch> 15%

  EBIT / Enterprise Value-22.0%

  ✗Greenblatt> 10%

  Earnings Yield + ROC AssessmentEY=-22.0%, ROC=N/A (invested capital <= 0)

  ✗GreenblattBoth EY > 10% and ROC > 25%

  Net Income / Total Assets10.23%

  ✓PiotroskiROA > 0

  ROA Change YoY-29.12% -> 10.23% (delta: +39.35%)

  ✓PiotroskiCurrent ROA > Prior ROA

  (CFO / Total Assets) vs ROACFO/Assets=1.58%, ROA=10.23%

  ✗PiotroskiCFO/Assets > ROA

  Gross Margin Change YoY73.0% -> 73.2%

  ✓PiotroskiImproved YoY

  Pre-Tax Income / Revenue11.8%

  ✓Dreman>= 8%

  Net Income / Shareholders' Equity

  ✗Dreman> 12%

  Margin of SafetyP/E=1.2x

  ✓PabraiP/B < 1.5 or P/E < 15

  Return on Equity-297.9% (3-yr avg)

  ✗AkreROE > 20% (3-year avg)

  Discount to Intrinsic Value

  ✗Marks>= 20% below intrinsic value

  Positive Net Income Frequency1/7 years positive

  ✗MarksPositive net income in >= 7 of last 10 years

  Operating Income / Revenue-12.3%

  ✗Ackman>= 15%

  Net Income / Shareholders Equity

  ✗Ackman>= 15%

  5-Year EPS CAGR

  ✗Templeton> 0% (5-year EPS CAGR)

  Operating Margin Trend-26.8% (2023) -> -17.4% (2025)

  ✓TempletonNon-negative operating-margin trend over 3 years

  Revenue growth vs. gross and operating margin trendgross margin 71.2% -> 73.2%, operating margin -26.8% -> -17.4%

  ✗SleepRevenue rising; gross margin flat or falling; operating margin holding

  Net income / market capitalization+56.47%; #128/6340 (top 2.0%)

  ✓AsnessTop 30% of eligible cross-section✓OshaughnessyTop 10% of eligible cross-section

  Gross profit / total assets+109.19%; #126/3702 (top 3.4%)

  ✓AsnessTop 30% of eligible cross-section

  Net income / positive book equity

  ✗AsnessTop 30% of eligible cross-section

  Negative 5-year standard deviation of ROA-0.2078; #4268/5884 (top 72.5%)

  ✗AsnessTop 30% of eligible cross-section

  3-5 Year Diluted EPS CAGR

  ✗Neff7%-20% annualized

  Positive Diluted-EPS Years1/7 years positive

  ✗Schloss>= 70% positive over 5-10 observed years (app rule)
• Valuation15% pass✓ 9✗ 19▾

  11 of 13 flag RENT's valuation — Graham, Lynch, Greenblatt +8 more

  Price / 3-yr avg EPS

  ✗Graham<= 15x

  Price-to-Book Ratio

  ✗Graham<= 1.5x

  P/E x P/B

  ✗Graham<= 22.5

  Basic earnings-growth PEG (dividends excluded)P/E 1.2x (growth N/A)

  ✗Lynch< 1.0 (ideally < 0.5)

  EBIT / Enterprise Value-22.0%

  ✗Greenblatt> 10%

  Earnings Yield + ROC AssessmentEY=-22.0%, ROC=N/A (invested capital <= 0)

  ✗GreenblattBoth EY > 10% and ROC > 25%

  Price / EPS1.2x

  ✓Dreman< 12x✓Templeton< 12x (fixed ceiling; proxy for the market's cheapest 40%)

  Price / (CFO / Shares)7.7x

  ✓Dreman< 8x

  Price / Book Value per ShareN/A (negative BVPS)

  ✗Dreman< 1.2x✗Templeton< 1.5x✗SchlossP/B <= 0.80x (app cutoff)

  Valuation ReasonablenessP/E=1.2x, OE Yield=119.9%

  ✓MungerP/E < 25 or Owner Earnings Yield > 5%

  P/E or FCF YieldP/E=1.2x

  ✓PabraiP/E < 15 or FCF Yield > 10%

  P/B or P/E vs. Historical AverageP/E=1.2x

  ✓MarksP/E < 15 or P/B < 2.0

  Discount to Intrinsic Value

  ✗Marks>= 20% below intrinsic value

  Price / FCF per Share

  ✗Ackman<= 25

  Price vs. Trailing Low135% of trailing low ($1.68)

  ✗Templeton<= 120% of trailing low (certified split-adjusted live window)

  Net income / market capitalization+56.47%; #128/6340 (top 2.0%)

  ✓AsnessTop 30% of eligible cross-section✓OshaughnessyTop 10% of eligible cross-section

  Positive book equity / market capitalization-0.8542; #6021/6449 (top 93.4%)

  ✗AsnessTop 30% of eligible cross-section

  Price / Diluted EPS1.2x

  ✓NeffP/E <= 15x (app proxy for a P/E 40%-60% below the market)

  (EPS CAGR % + Dividend Yield %) / P/E

  ✗Neff> 0.7 (Neff's published traditional edge)

  Price / Tangible Book Value per ShareN/A (non-positive TBVPS)

  ✗SchlossP/TBV <= 1.00x (app cutoff)

  Book Value per Share Change

  ✗SchlossLatest BVPS >= earliest BVPS over >= 3 years (app rule)

  Revenue / market capitalization+4.7847; #561/5247 (top 10.7%)

  ✗OshaughnessyTop 10% of eligible cross-section

  (Operating cash flow - capex) / market capitalization

  ✗OshaughnessyTop 10% of eligible cross-section

  Trailing six-month price return through the evaluation date-59.93%; #5398/6202 (top 87.0%)

  ✗OshaughnessyTop 10% of eligible cross-section
• Cash Flow20% pass✓ 3✗ 9▾

  8 of 10 flag RENT's cash flow — Buffett, Lynch, Piotroski +5 more

  Free Cash Flow Proxy

  ✗BuffettPositive and growing

  FCF Positive and Growing

  ✗LynchPositive and growing

  Operating Cash Flow$3.5M

  ✓PiotroskiCFO > 0

  (CFO / Total Assets) vs ROACFO/Assets=1.58%, ROA=10.23%

  ✗PiotroskiCFO/Assets > ROA

  Price / (CFO / Shares)7.7x

  ✓Dreman< 8x

  P/E or FCF YieldP/E=1.2x

  ✓PabraiP/E < 15 or FCF Yield > 10%

  FCF Positive

  ✗MarksPositive FCF in majority of recent years

  (OCF - CapEx) / Market Cap

  ✗Ackman>= 4%

  Price / FCF per Share

  ✗Ackman<= 25

  Positive Operating Cash Flow frequency2/7 years positive

  ✗SleepPositive OCF in >= 70% of available years

  Operating Cash Flow - Capital Expenditures

  ✗Neff> $0 (app proxy for a strong fundamental case)

  (Operating cash flow - capex) / market capitalization

  ✗OshaughnessyTop 10% of eligible cross-section