Comparing Rent the Runway (NASDAQ:RENT) & Ross Stores (NASDAQ:ROST)

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

Earnings and Valuation

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

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Rent the Runway	$329.80 million	0.36	$22.60 million	$6.49	0.54
Ross Stores	$22.75 billion	3.46	$2.15 billion	$7.16	34.27

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.

Volatility and Risk

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

Insider and Institutional Ownership

73.1% of Rent the Runway shares are owned by institutional investors. Comparatively, 86.9% of Ross Stores shares are owned by institutional investors. 0.4% of Rent the Runway shares are owned by company insiders. Comparatively, 2.1% of Ross Stores shares are owned by company insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock is poised for long-term growth.

Analyst Recommendations

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

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Rent the Runway	1	0	0	0	1.00
Ross Stores	0	6	15	0	2.71

Ross Stores has a consensus target price of $240.00, suggesting a potential downside of 2.18%. Given Ross Stores’ stronger consensus rating and higher probable upside, analysts plainly believe Ross Stores is more favorable than Rent the Runway.

Profitability

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

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

Summary

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

About Rent the Runway

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.

About Ross Stores

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.