Children’s Place (NASDAQ:PLCE) & Rent the Runway (NASDAQ:RENT) Critical Contrast

Children’s Place (NASDAQ:PLCE) and Rent the Runway (NASDAQ:RENT) are both small-cap retail/wholesale companies, but which is the better business? We will compare the two companies based on the strength of their dividends, institutional ownership, profitability, analyst recommendations, earnings, valuation and risk.

Analyst Ratings

This is a summary of recent ratings for Children’s Place and Rent the Runway, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Children’s Place	1	1	0	0	1.50
Rent the Runway	1	0	0	0	1.00

Children’s Place currently has a consensus price target of $4.00, indicating a potential upside of 35.14%. Given Children’s Place’s stronger consensus rating and higher probable upside, research analysts clearly believe Children’s Place is more favorable than Rent the Runway.

Risk & Volatility

Children’s Place has a beta of 1.94, meaning that its share price is 94% more volatile than the S&P 500. Comparatively, Rent the Runway has a beta of 1.19, meaning that its share price is 19% more volatile than the S&P 500.

Earnings & Valuation

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

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Children’s Place	$1.21 billion	0.05	-$88.26 million	($4.84)	-0.61
Rent the Runway	$329.80 million	0.32	$22.60 million	$6.49	0.49

Rent the Runway has lower revenue, but higher earnings than Children’s Place. Children’s Place is trading at a lower price-to-earnings ratio than Rent the Runway, indicating that it is currently the more affordable of the two stocks.

Profitability

This table compares Children’s Place and Rent the Runway’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Children’s Place	-9.09%	N/A	-12.53%
Rent the Runway	8.51%	N/A	-30.10%

Institutional & Insider Ownership

73.1% of Rent the Runway shares are held by institutional investors. 0.9% of Children’s Place shares are held by company insiders. Comparatively, 0.4% of Rent the Runway shares are held by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock is poised for long-term growth.

About Children’s Place

The Children’s Place, Inc. engages in the provision of apparel, footwear, accessories, and other items for children. The firm also designs contracts to manufacture and sell fashionable and value-priced merchandise under the brand names of The Children’s Place, Baby Place, and Gymboree. It operates through The Children’s Place U.S. and The Children’s Place International segments. The Children’s Place U.S. segment refers to the company’s U.S. and Puerto Rico-based stores and revenue from its U.S. based wholesale business. The Children’s Place International segment is involved in the Canadian-based stores, revenue from the company’s Canadian-based wholesale business, as well as revenue from international franchisees. The company was founded by David Pulver and Clinton A. Clark in 1969 and is headquartered in Secaucus, NJ.

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.