Advantage Solutions (NASDAQ:ADV – Get Free Report) and RealReal (NASDAQ:REAL – Get Free Report) are both small-cap consumer discretionary companies, but which is the better stock? We will compare the two businesses based on the strength of their analyst recommendations, dividends, institutional ownership, earnings, profitability, risk and valuation.
Volatility & Risk
Advantage Solutions has a beta of 2.17, indicating that its stock price is 117% more volatile than the S&P 500. Comparatively, RealReal has a beta of 2.56, indicating that its stock price is 156% more volatile than the S&P 500.
Institutional and Insider Ownership
49.8% of Advantage Solutions shares are owned by institutional investors. Comparatively, 64.7% of RealReal shares are owned by institutional investors. 7.9% of Advantage Solutions shares are owned by insiders. Comparatively, 9.0% of RealReal shares are owned by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock will outperform the market over the long term.
Analyst Ratings
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score | |
| Advantage Solutions | 1 | 0 | 1 | 0 | 2.00 |
| RealReal | 1 | 1 | 4 | 0 | 2.50 |
Advantage Solutions currently has a consensus price target of $2.25, indicating a potential upside of 52.03%. RealReal has a consensus price target of $11.70, indicating a potential upside of 23.81%. Given Advantage Solutions’ higher possible upside, equities research analysts clearly believe Advantage Solutions is more favorable than RealReal.
Profitability
This table compares Advantage Solutions and RealReal’s net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets | |
| Advantage Solutions | -8.72% | -39.45% | -9.63% |
| RealReal | -5.55% | N/A | -8.90% |
Earnings & Valuation
This table compares Advantage Solutions and RealReal”s revenue, earnings per share and valuation.
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio | |
| Advantage Solutions | $3.57 billion | 0.14 | -$326.96 million | ($0.94) | -1.57 |
| RealReal | $600.48 million | 1.81 | -$134.20 million | ($1.06) | -8.92 |
RealReal has lower revenue, but higher earnings than Advantage Solutions. RealReal is trading at a lower price-to-earnings ratio than Advantage Solutions, indicating that it is currently the more affordable of the two stocks.
Summary
RealReal beats Advantage Solutions on 10 of the 14 factors compared between the two stocks.
About Advantage Solutions
Advantage Solutions Inc. provides business solutions to consumer goods manufacturers and retailers in North America and internationally. It operates in two segments, Sales and Marketing. The Sales segment offers brand-centric services, such as headquarter relationship management; analytics, insights, and intelligence; and brand-centric merchandising services. This segment also provides retailer-centric services comprising retailer-centric merchandising and in-store media services. The Marketing segment offers brand-centric services, including shopper and consumer marketing, and brand experiential services; retailer-centric services, such as retail experiential and private label services; and digital marketing, and digital media and advertising services. The company was formerly known as Karman Holding Corp. and changed its name to Advantage Solutions Inc. in March 2016. The company was founded in 1987 and is headquartered in Irvine, California.
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.
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