Head-To-Head Analysis: Leslie’s (NASDAQ:LESL) vs. RH (NYSE:RH)

Leslie’s (NASDAQ:LESL) and RH (NYSE:RH) are both consumer staples companies, but which is the superior investment? We will contrast the two companies based on the strength of their profitability, dividends, institutional ownership, earnings, analyst recommendations, risk and valuation.

Volatility & Risk

Leslie’s has a beta of 1.22, suggesting that its stock price is 22% more volatile than the S&P 500. Comparatively, RH has a beta of 2.21, suggesting that its stock price is 121% more volatile than the S&P 500.

Profitability

This table compares Leslie’s and RH’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Leslie’s	-6.72%	N/A	-4.96%
RH	3.20%	-113.58%	3.08%

Analyst Ratings

This is a breakdown of current ratings and recommmendations for Leslie’s and RH, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Leslie’s	2	10	0	0	1.83
RH	4	7	10	0	2.29

Leslie’s presently has a consensus target price of $27.25, indicating a potential upside of 773.40%. RH has a consensus target price of $259.29, indicating a potential upside of 59.94%. Given Leslie’s’ higher possible upside, analysts plainly believe Leslie’s is more favorable than RH.

Insider & Institutional Ownership

90.2% of RH shares are held by institutional investors. 0.7% of Leslie’s shares are held by insiders. Comparatively, 27.0% of RH shares are held by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company is poised for long-term growth.

Earnings and Valuation

This table compares Leslie’s and RH”s gross revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Leslie’s	$1.33 billion	0.02	-$23.38 million	($9.00)	-0.35
RH	$3.18 billion	0.96	$72.41 million	$5.37	30.19

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

Summary

RH beats Leslie’s on 12 of the 14 factors compared between the two stocks.

About Leslie’s

Leslie’s, Inc. operates as a direct-to-consumer pool and spa care brand in the United States. The company markets and sells pool and spa supplies and related products and services. It also offers various pool and spa maintenance items, such as chemicals, equipment and parts, cleaning and maintenance equipment, safety, recreational, and fitness related products. In addition, the company provides installation and repair services for pool and spa equipment. It also sells its products through e-commerce websites and third-party marketplaces. The company offers complimentary, commercial-grade in-store, water testing, and analysis services. It serves the residential, professional, and commercial consumers. Leslie’s, Inc. was founded in 1963 and is based in Phoenix, Arizona.

About RH

RH, together with its subsidiaries, operates as a retailer in the home furnishings market. The company offers products in various categories, including furniture, lighting, textiles, bathware, décor, outdoor and garden, baby, child, and teen furnishings. It provides its products through rh.com, rhbabyandchild.com, rhteen.com, rhmodern.com, and waterworks.com online channels, as well as operates RH Galleries, RH outlet stores, RH Guesthouse, and Waterworks showrooms in the United States, Canada, the United Kingdom, and Germany. The company was formerly known as Restoration Hardware Holdings, Inc. and changed its name to RH in January 2017. RH was incorporated in 2011 and is headquartered in Corte Madera, California.