Head to Head Analysis: Zalando (OTCMKTS:ZLNDY) and ThredUp (NASDAQ:TDUP)

Zalando (OTCMKTS:ZLNDY) and ThredUp (NASDAQ:TDUP) are both 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 Zalando and ThredUp, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Zalando	0	1	1	2	3.25
ThredUp	1	0	4	0	2.60

ThredUp has a consensus price target of $6.55, suggesting a potential upside of 164.11%. Given ThredUp’s higher possible upside, analysts plainly believe ThredUp is more favorable than Zalando.

Risk and Volatility

Zalando has a beta of 1.46, indicating that its stock price is 46% more volatile than the S&P 500. Comparatively, ThredUp has a beta of 2.11, indicating that its stock price is 111% more volatile than the S&P 500.

Profitability

This table compares Zalando and ThredUp’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Zalando	0.70%	3.46%	1.06%
ThredUp	-6.65%	-37.30%	-13.03%

Valuation and Earnings

This table compares Zalando and ThredUp”s top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Zalando	$13.97 billion	0.47	$243.36 million	$0.22	60.91
ThredUp	$310.81 million	1.05	-$20.21 million	($0.17)	-14.59

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

Insider & Institutional Ownership

89.1% of ThredUp shares are held by institutional investors. 23.1% of ThredUp 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.

Summary

Zalando beats ThredUp on 9 of the 15 factors compared between the two stocks.

About Zalando

Zalando SE operates an online platform for fashion and lifestyle products. The company operates through Fashion Store and Offprice segments. It provides shoes, apparel, accessories, and beauty products with free delivery and returns, as well as various payment options. The company also sells its products through Lounge by Zalando; and brick-and-mortar outlet stores. It operates in Germany, Austria, Switzerland, Belgium, Croatia, the Czech Republic, Denmark, Estonia, Finland, Hungary, France, Ireland, Italy, Latvia, Lithuania, Luxembourg, the Netherlands, Norway, Poland, Romania, Slovakia, Slovenia, Spain, Sweden, and the United Kingdom. The company was founded in 2008 and is headquartered in Berlin, Germany.

About ThredUp

ThredUp Inc., together with its subsidiaries, operates an online resale platform in the United States and internationally. Its platform enables consumers to buy and sell primarily secondhand apparel, shoes, and accessories. ThredUp Inc. was incorporated in 2009 and is headquartered in Oakland, California.