Contrasting Zumiez (NASDAQ:ZUMZ) and ON (NYSE:ONON)

ON (NYSE:ONON) and Zumiez (NASDAQ:ZUMZ) are both retail/wholesale companies, but which is the better stock? We will compare the two businesses based on the strength of their risk, earnings, valuation, profitability, dividends, institutional ownership and analyst recommendations.

Analyst Recommendations

This is a summary of recent ratings and price targets for ON and Zumiez, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
ON	2	3	17	3	2.84
Zumiez	0	2	0	1	2.67

ON currently has a consensus target price of $60.14, suggesting a potential upside of 30.87%. Zumiez has a consensus target price of $18.00, suggesting a potential downside of 27.65%. Given ON’s stronger consensus rating and higher probable upside, equities research analysts plainly believe ON is more favorable than Zumiez.

Earnings and Valuation

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

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
ON	$2.88 billion	10.03	$275.23 million	$0.77	59.68
Zumiez	$916.91 million	0.46	-$1.71 million	$0.48	51.83

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

Risk and Volatility

ON has a beta of 2.15, suggesting that its share price is 115% more volatile than the S&P 500. Comparatively, Zumiez has a beta of 0.86, suggesting that its share price is 14% less volatile than the S&P 500.

Profitability

This table compares ON and Zumiez’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
ON	7.45%	14.81%	8.48%
Zumiez	0.94%	2.33%	1.14%

Institutional and Insider Ownership

36.4% of ON shares are owned by institutional investors. Comparatively, 95.4% of Zumiez shares are owned by institutional investors. 68.6% of ON shares are owned by company insiders. Comparatively, 21.2% of Zumiez shares are owned by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock will outperform the market over the long term.

Summary

ON beats Zumiez on 14 of the 15 factors compared between the two stocks.

About ON

On Holding AG engages in the development and distribution of sports products such as footwear, apparel, and accessories for high-performance running, outdoor, all-day activities, and tennis. It sells its products worldwide through independent retailers and global distributors, its own online presence, and its own stores. The company was founded by David Allemann, Olivier Bernhard, and Caspar Coppetti in January 2010 and is headquartered in Zurich, Switzerland.

About Zumiez

Zumiez Inc. operates as a specialty retailer of apparel, footwear, accessories, and hardgoods for young men and women. The company provides hardgoods, including skateboards, snowboards, bindings, components, and other equipment. It operates stores in the United States, Canada, Europe, and Australia under the names of Zumiez, Blue Tomato, and Fast Times. It operates zumiez.com, zumiez.ca, blue-tomato.com, and fasttimes.com.au e-commerce websites. Zumiez Inc. was founded in 1978 and is headquartered in Lynnwood, Washington.