RealReal (NASDAQ:REAL) vs. Macy’s (NYSE:M) Head to Head Analysis

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

Risk and Volatility

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

Insider & Institutional 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 endowments, hedge funds and large money managers believe a company is poised for long-term growth.

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%

Analyst Ratings

This is a breakdown of recent ratings and recommmendations for Macy’s and RealReal, as provided by MarketBeat.com.

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

Earnings & Valuation

This table compares Macy’s and RealReal”s top-line revenue, earnings per share 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.

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.