Analyzing Zalando (OTCMKTS:ZLNDY) & AutoNation (NYSE:AN)

AutoNation (NYSE:AN) and Zalando (OTCMKTS:ZLNDY) are both mid-cap consumer discretionary companies, but which is the better business? We will compare the two businesses based on the strength of their dividends, earnings, profitability, valuation, analyst recommendations, institutional ownership and risk.

Earnings & Valuation

This table compares AutoNation and Zalando”s top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
AutoNation	$27.63 billion	0.21	$649.10 million	$21.59	8.29
Zalando	$13.97 billion	0.52	$243.36 million	$0.22	67.64

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

Risk & Volatility

AutoNation has a beta of 0.81, meaning that its stock price is 19% less volatile than the S&P 500. Comparatively, Zalando has a beta of 1.46, meaning that its stock price is 46% more volatile than the S&P 500.

Analyst Recommendations

This is a summary of recent ratings and recommmendations for AutoNation and Zalando, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
AutoNation	2	3	8	0	2.46
Zalando	0	1	1	2	3.25

AutoNation currently has a consensus target price of $230.00, suggesting a potential upside of 28.46%. Given AutoNation’s higher possible upside, equities research analysts plainly believe AutoNation is more favorable than Zalando.

Institutional & Insider Ownership

94.6% of AutoNation shares are owned by institutional investors. 1.4% of AutoNation shares are owned by insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a company will outperform the market over the long term.

Profitability

This table compares AutoNation and Zalando’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
AutoNation	2.82%	31.24%	4.97%
Zalando	0.70%	3.46%	1.06%

Summary

AutoNation beats Zalando on 10 of the 15 factors compared between the two stocks.

About AutoNation

AutoNation, Inc., through its subsidiaries, operates as an automotive retailer in the United States. The company operates through three segments: Domestic, Import, and Premium Luxury. It offers a range of automotive products and services, including new and used vehicles; and parts and services, such as automotive repair and maintenance, and wholesale parts and collision services. The company also provides automotive finance and insurance products comprising vehicle services and other protection products; and indirect financing for vehicles, as well as arranges finance for vehicle purchases through third-party finance sources. It owns and operates new vehicle franchises from stores located primarily in metropolitan markets in the Sunbelt region, as well as AutoNation-branded collision centers, AutoNation USA used vehicle stores, AutoNation-branded automotive auction operations, and parts distribution centers. The company was formerly known as Republic Industries, Inc. and changed its name to AutoNation, Inc. in 1999. AutoNation, Inc. was incorporated in 1980 and is headquartered in Fort Lauderdale, Florida.

About Zalando

Zalando SE operates an online platform for fashion and lifestyle products. The company operates through Fashion Store and Offprice segments. It provides shoes, apparel, accessories, and beauty products with free delivery and returns, as well as various payment options. The company also sells its products through Lounge by Zalando; and brick-and-mortar outlet stores. It operates in Germany, Austria, Switzerland, Belgium, Croatia, the Czech Republic, Denmark, Estonia, Finland, Hungary, France, Ireland, Italy, Latvia, Lithuania, Luxembourg, the Netherlands, Norway, Poland, Romania, Slovakia, Slovenia, Spain, Sweden, and the United Kingdom. The company was founded in 2008 and is headquartered in Berlin, Germany.