Head-To-Head Comparison: Macy’s (NYSE:M) and RealReal (NASDAQ:REAL)

Macy’s (NYSE:M) and RealReal (NASDAQ:REAL) are both consumer discretionary companies, but which is the superior stock? We will contrast the two companies based on the strength of their earnings, risk, analyst recommendations, dividends, valuation, profitability and institutional ownership.

Volatility & Risk

Macy’s has a beta of 1.41, meaning that its stock price is 41% more volatile than the S&P 500. Comparatively, RealReal has a beta of 2.69, meaning that its stock price is 169% more volatile than the S&P 500.

Institutional and Insider Ownership

87.4% of Macy’s shares are owned by institutional investors. Comparatively, 64.7% of RealReal shares are owned by institutional investors. 1.1% of Macy’s shares are owned by company insiders. Comparatively, 2.7% of RealReal shares are owned by company insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock is poised for long-term growth.

Analyst Ratings

This is a summary of recent ratings and target prices for Macy’s and RealReal, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Macy’s	2	8	3	1	2.21
RealReal	1	2	6	0	2.56

Macy’s currently has a consensus target price of $22.00, indicating a potential downside of 1.65%. RealReal has a consensus target price of $17.75, indicating a potential upside of 75.48%. Given RealReal’s stronger consensus rating and higher possible upside, analysts plainly believe RealReal is more favorable than Macy’s.

Valuation & Earnings

This table compares Macy’s and RealReal”s gross revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Macy’s	$22.62 billion	0.26	$642.00 million	$2.42	9.24
RealReal	$749.91 million	1.64	-$41.80 million	($1.12)	-9.03

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

Profitability

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

	Net Margins	Return on Equity	Return on Assets
Macy’s	2.94%	13.68%	3.88%
RealReal	-10.82%	N/A	-17.99%

Summary

Macy’s beats RealReal on 9 of the 15 factors compared between the two stocks.

About Macy’s

Macy’s, Inc. engages in the retail of apparel, accessories, cosmetics, home furnishings, and other consumer goods. The firm’s brands include Macy’s, Bloomingdale’s, and Bluemercury. It offers men’s, women’s, and children’s apparel, women’s accessories, intimate apparel, shoes, cosmetics, fragrances, as well as home and miscellaneous products. The company was founded by Rowland H. Macy in 1858 and is headquartered in New York, NY.

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.