Critical Comparison: ZOZO (OTCMKTS:SRTTY) versus RealReal (NASDAQ:REAL)

ZOZO (OTCMKTS:SRTTY) and RealReal (NASDAQ:REAL) are both consumer discretionary companies, but which is the better investment? We will compare the two companies based on the strength of their earnings, valuation, dividends, risk, profitability, analyst recommendations and institutional ownership.

Analyst Ratings

This is a summary of recent recommendations and price targets for ZOZO and RealReal, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
ZOZO	0	0	0	0	0.00
RealReal	1	2	6	0	2.56

RealReal has a consensus price target of $17.75, indicating a potential upside of 80.02%. Given RealReal’s stronger consensus rating and higher possible upside, analysts clearly believe RealReal is more favorable than ZOZO.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
ZOZO	N/A	N/A	N/A
RealReal	-10.82%	N/A	-17.99%

Earnings & Valuation

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

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
ZOZO	N/A	N/A	N/A	N/A	N/A
RealReal	$749.91 million	1.60	-$41.80 million	($1.12)	-8.80

ZOZO has higher earnings, but lower revenue than RealReal.

Institutional and Insider Ownership

64.7% of RealReal shares are held by institutional investors. 2.7% of RealReal shares are held by insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a company is poised for long-term growth.

Summary

RealReal beats ZOZO on 6 of the 8 factors compared between the two stocks.

About ZOZO

ZOZO, Inc. operates online shopping Websites in Japan and internationally. It operates ZOZOTOWN a fashion online shopping website; WEAR, a fashion app; Multi-Size platform, a new way of shopping for clothes where users select their height and weight to purchase their ideal size; ZOZOUSED, a website for secondhand/vintage apparel; ZOZOFIT, a body management service; ZOZOGLASS, a skin tone capturing device that solves customers' challenge of cosmetic product color selection; ZOZOMAT, a 3D foot measuring tool; ZOZOSUIT, a 3D measurement bodysuit; and PayPay mall. In addition, it engages in the advertisement business. The company was formerly known as Start Today Co., Ltd. and changed its name to ZOZO, Inc. in October 2018. ZOZO, Inc. was incorporated in 1998 and is headquartered in Chiba, Japan. ZOZO, Inc. operates as a subsidiary of Z Holdings Corporation.

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.