Analyzing RealReal (NASDAQ:REAL) & Lavoro (NASDAQ:LVRO)

RealReal (NASDAQ:REAL) and Lavoro (NASDAQ:LVRO) are both small-cap consumer discretionary companies, but which is the superior investment? We will contrast the two businesses based on the strength of their earnings, risk, analyst recommendations, valuation, institutional ownership, dividends and profitability.

Analyst Ratings

This is a breakdown of recent recommendations for RealReal and Lavoro, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
RealReal	0	4	2	0	2.33
Lavoro	0	1	2	0	2.67

RealReal presently has a consensus price target of $3.61, suggesting a potential upside of 0.68%. Lavoro has a consensus price target of $10.00, suggesting a potential upside of 78.57%. Given Lavoro’s stronger consensus rating and higher possible upside, analysts plainly believe Lavoro is more favorable than RealReal.

Risk and Volatility

RealReal has a beta of 2.99, indicating that its stock price is 199% more volatile than the S&P 500. Comparatively, Lavoro has a beta of 0.12, indicating that its stock price is 88% less volatile than the S&P 500.

Profitability

This table compares RealReal and Lavoro’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
RealReal	-30.67%	N/A	-26.38%
Lavoro	-5.99%	-6.44%	-1.45%

Insider & Institutional Ownership

64.7% of RealReal shares are held by institutional investors. Comparatively, 2.5% of Lavoro shares are held by institutional investors. 9.3% of RealReal shares are held by insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock will outperform the market over the long term.

Earnings & Valuation

This table compares RealReal and Lavoro’s revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
RealReal	$549.30 million	0.69	-$168.47 million	($1.67)	-2.15
Lavoro	$1.79 billion	0.36	-$50.50 million	($0.98)	-5.71

Lavoro has higher revenue and earnings than RealReal. Lavoro is trading at a lower price-to-earnings ratio than RealReal, indicating that it is currently the more affordable of the two stocks.

Summary

Lavoro beats RealReal on 7 of the 13 factors compared between the two stocks.

About RealReal

The RealReal, Inc. operates an online marketplace for resale luxury goods in the United State. The company offers various product categories, including women's fashion, men's fashion, jewelry, and watches. It primarily sells products through online marketplace and retail stores. The company was incorporated in 2011 and is headquartered in San Francisco, California.

About Lavoro

Lavoro Limited operates as an agricultural inputs retailer. The company operates through three segments: Brazil Cluster, LATAM Cluster, and Crop Care Cluster. It distributes agricultural inputs, such as crop protection, seeds, fertilizers, foliar fertilizers, biologicals, adjuvants, organominerals, and others for the agricultural industry. The company also produces specialty fertilizers, crop protection products, and biological crop inputs. It operates in Brazil, Colombia, and Uruguay. The company sells its products through its physical stores and digital channel. Lavoro Limited was founded in 2017 and is headquartered in Sao Paulo, Brazil.