Contrasting Ross Stores (NASDAQ:ROST) and Rent the Runway (NASDAQ:RENT)

Ross Stores (NASDAQ:ROSTGet Free Report) and Rent the Runway (NASDAQ:RENTGet Free Report) are both consumer discretionary companies, but which is the superior investment? We will compare the two businesses based on the strength of their risk, valuation, analyst recommendations, profitability, earnings, dividends and institutional ownership.

Institutional and Insider Ownership

86.9% of Ross Stores shares are held by institutional investors. Comparatively, 73.1% of Rent the Runway shares are held by institutional investors. 2.1% of Ross Stores shares are held by company insiders. Comparatively, 0.4% of Rent the Runway shares are held by company 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.

Analyst Recommendations

This is a summary of current ratings for Ross Stores and Rent the Runway, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Ross Stores 0 5 16 0 2.76
Rent the Runway 1 0 0 0 1.00

Ross Stores currently has a consensus target price of $251.12, suggesting a potential upside of 4.91%. Given Ross Stores’ stronger consensus rating and higher possible upside, equities research analysts clearly believe Ross Stores is more favorable than Rent the Runway.

Valuation and Earnings

This table compares Ross Stores and Rent the Runway”s revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Ross Stores $22.75 billion 3.38 $2.15 billion $7.16 33.43
Rent the Runway $329.80 million 0.38 $22.60 million $6.49 0.58

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

Profitability

This table compares Ross Stores and Rent the Runway’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Ross Stores 9.74% 38.42% 15.18%
Rent the Runway 8.51% N/A -30.10%

Risk & Volatility

Ross Stores has a beta of 0.86, suggesting that its stock price is 14% less volatile than the S&P 500. Comparatively, Rent the Runway has a beta of 1.18, suggesting that its stock price is 18% more volatile than the S&P 500.

Summary

Ross Stores beats Rent the Runway on 13 of the 14 factors compared between the two stocks.

About Ross Stores

(Get Free Report)

Ross Stores, Inc., together with its subsidiaries, operates off-price retail apparel and home fashion stores under the Ross Dress for Less and dd’s DISCOUNTS brand names in the United States. Its stores primarily offer apparel, accessories, footwear, and home fashions. The company’s Ross Dress for Less stores sell its products at department and specialty stores to middle income households; and dd’s DISCOUNTS stores sell its products at department and discount stores for households with moderate income. Ross Stores, Inc. was incorporated in 1957 and is headquartered in Dublin, California.

About Rent the Runway

(Get Free Report)

Rent the Runway, Inc. operates shared designer closet in the United States. The company offers evening wear and accessories, ready-to-wear, workwear, denim, casual, maternity, outerwear, blouses, knitwear, loungewear, jewelry, handbags, activewear, and ski wear under subscription, rental, and resale offering. It also engages in the software development and support activities. Rent the Runway, Inc. was incorporated in 2009 and is headquartered in Brooklyn, New York.

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