Comparing Etsy (NYSE:ETSY) & RealReal (NASDAQ:REAL)

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

Insider and Institutional Ownership

99.5% of Etsy shares are owned by institutional investors. Comparatively, 64.7% of RealReal shares are owned by institutional investors. 2.5% of Etsy 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, large money managers and hedge funds believe a stock will outperform the market over the long term.

Earnings and Valuation

This table compares Etsy and RealReal”s gross revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Etsy	$2.88 billion	2.80	$162.98 million	$1.79	47.49
RealReal	$692.84 million	1.82	-$41.80 million	($1.12)	-9.28

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

Volatility & Risk

Etsy has a beta of 1.86, meaning that its share price is 86% more volatile than the S&P 500. Comparatively, RealReal has a beta of 2.81, meaning that its share price is 181% more volatile than the S&P 500.

Analyst Ratings

This is a summary of recent ratings and price targets for Etsy and RealReal, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Etsy	1	18	14	2	2.49
RealReal	1	2	6	0	2.56

Etsy currently has a consensus target price of $86.21, indicating a potential upside of 1.40%. RealReal has a consensus target price of $17.75, indicating a potential upside of 70.84%. Given RealReal’s stronger consensus rating and higher probable upside, analysts plainly believe RealReal is more favorable than Etsy.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
Etsy	7.32%	-34.18%	15.29%
RealReal	-10.82%	N/A	-17.99%

Summary

Etsy beats RealReal on 9 of the 14 factors compared between the two stocks.

About Etsy

Etsy, Inc. operates two-sided online marketplaces that connect buyers and sellers primarily in the United States, the United Kingdom, Germany, Canada, Australia, France, and India. Its primary marketplace is Etsy.com that connects artisans and entrepreneurs with various consumers. The company also offers Reverb, a musical instrument marketplace; Depop, a fashion resale marketplace; and Elo7, a Brazil-based marketplace for handmade and unique items. In addition, it offers various seller services, including Etsy Payments, a payment processing service; Etsy Ads, an advertising platform; and Shipping Labels, which allows sellers in the United States, Canada, the United Kingdom, Australia, and India to purchase discounted shipping labels. Further, the company provides various seller tools, including Shop Manager dashboard, a centralized hub for Etsy sellers to track orders, manage inventory, view metrics and statistics, and have conversations with their customers; and Sell on Etsy, an application to enable enhanced onboarding and video uploading. Additionally, it offers Etsy seller analytics pages that provides insights regarding traffic acquisition for their shops; Targeted Offers, a sales and promotions tool, and social media tool; and accounting and bookkeeping services. The company also provides educational resources comprising blog posts, video tutorials, Etsy Seller Handbook, Etsy.com online forums, and insights; Etsy Teams, a platform to build personal relationships with other Etsy sellers; and a Star Seller program. As of December 31, 2021, it connected a total of 7.5 million active sellers to 96.3 million active buyers; and had 120 million items for sale. The company was formerly known as Indieco, Inc changed its name to Etsy, Inc. in June 2006. Etsy, Inc. was founded in 2005 and is headquartered in Brooklyn, New York.

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.