Head-To-Head Analysis: Wayfair (NYSE:W) vs. GrowGeneration (NASDAQ:GRWG)

GrowGeneration (NASDAQ:GRWG) and Wayfair (NYSE:W) are both consumer discretionary companies, but which is the better investment? We will contrast the two companies based on the strength of their institutional ownership, risk, analyst recommendations, profitability, dividends, valuation and earnings.

Profitability

This table compares GrowGeneration and Wayfair’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
GrowGeneration	-10.07%	-17.44%	-11.52%
Wayfair	-2.49%	-3.40%	3.06%

Earnings and Valuation

This table compares GrowGeneration and Wayfair”s revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
GrowGeneration	$166.68 million	0.55	-$24.05 million	($0.27)	-5.81
Wayfair	$12.90 billion	1.03	-$313.00 million	($2.46)	-41.12

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

Risk & Volatility

GrowGeneration has a beta of 2.54, meaning that its stock price is 154% more volatile than the S&P 500. Comparatively, Wayfair has a beta of 3.02, meaning that its stock price is 202% more volatile than the S&P 500.

Analyst Recommendations

This is a summary of current recommendations for GrowGeneration and Wayfair, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
GrowGeneration	1	1	1	0	2.00
Wayfair	1	11	18	2	2.66

GrowGeneration presently has a consensus price target of $2.50, indicating a potential upside of 59.24%. Wayfair has a consensus price target of $120.89, indicating a potential upside of 19.50%. Given GrowGeneration’s higher possible upside, analysts clearly believe GrowGeneration is more favorable than Wayfair.

Insider & Institutional Ownership

36.0% of GrowGeneration shares are held by institutional investors. Comparatively, 89.7% of Wayfair shares are held by institutional investors. 8.1% of GrowGeneration shares are held by insiders. Comparatively, 18.4% of Wayfair shares are held by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company will outperform the market over the long term.

Summary

Wayfair beats GrowGeneration on 11 of the 15 factors compared between the two stocks.

About GrowGeneration

GrowGeneration Corp., through its subsidiaries, owns and operates retail hydroponic and organic gardening stores in the United States. The company engages in the marketing and distribution of nutrients, additives, growing media, lighting, and environmental control systems, as well as other indoor and outdoor growing products. It operates a chain of stores in California, Colorado, Michigan, Maine, Oklahoma, Oregon, Washington, Montana, New York, Ohio, Mississippi, Missouri, Arizona, Rhode Island, Florida, Massachusetts, Virginia, New Jersey, and New Mexico, as well as growgeneration.com, an online superstore for cultivators, a wholesale business for resellers, HRG Distribution, and benching, racking, and storage solutions and MMI. The company was formerly known as Easylife Corp. GrowGeneration Corp. was founded in 2008 and is based in Greenwood Village, Colorado.

About Wayfair

Wayfair Inc. provides e-commerce business in the United States and internationally. The company offers approximately thirty million products for the home sector. It offers online selections of furniture, décor, housewares, and home improvement products through its sites consisting of Wayfair, Joss & Main, AllModern, Birch Lane, Perigold, and Wayfair Professional. The company offers its products under the Three Posts and Mercury Row brand name. The company was founded in 2002 and is headquartered in Boston, Massachusetts.