According to Credit Suisse, investors should stop buying Rent the Runway until it can show significant active subscriber growth again. Analyst Michael Binetti downgraded Rent the Runway to neutral vs. better performance and slashed his price target, saying he overestimated the impact of a return to social events for the fashion rental company’s active subscriber growth in the second quarter. “Significant decline in Active Customer trend during the quarter (quarterly active sub-growth slowed to -8% in Q2 vs Street +7%, decelerating from +17% in Q1) suggests that RENT is more susceptible to macro pressures on aspiring consumers than we expected,” Binetti wrote in a note Monday. “In other words, consumers don’t see RENT as a way to save money (despite the very clear value message in Q2 marketing) compared to the traditional wardrobe ownership model…instead… That said, consumers are protecting household budgets by eliminating recurring monthly discretionary fees like RENT.” Shares fell 22% in pre-market trading Tuesday after Rent the Runway says it’s laying off 24% of its workforce, as more and more consumers pause or terminate subscriptions to rentals. Rent the Runway reported 124,131 active subscribers last quarter. Additionally, the company has decided to cut its fixed costs by $25 million to $27 million in response to the uncertain macro backdrop, a decision analysts fear may be premature for the company. company growth. Shares of Rent the Runway are down nearly 40% so far and 80% off their 52-week high, and analysts don’t expect them to rise from here until the company reverses. its positive consumption growth trend. “We don’t think RENT’s valuation will ever go higher again until it can demonstrate that the positive customer growth trend can pick up pace again and the company’s 24% headcount reduction.” company makes us confident that the trend improvement in August/September will be sustainable,” Binetti wrote. Binetti added: “We want to turn the sidelines in light of better evidence that consumers consider jobs clothing rentals are a strong enough value for the manageable costs associated with traditional apparel ownership models. dollars, implying a roughly 18.9% drop for Rent The Runway from Monday’s closing price of $4.93 — CNBC’s Michael Bloom contributed to this report.