Financial Comparison: Rent the Runway (NASDAQ:RENT) vs. Zumiez (NASDAQ:ZUMZ)

Zumiez (NASDAQ:ZUMZ) and Rent the Runway (NASDAQ:RENT) are both small-cap retail/wholesale companies, but which is the superior stock? We will compare the two companies based on the strength of their risk, institutional ownership, valuation, profitability, dividends, earnings and analyst recommendations.

Valuation & Earnings

This table compares Zumiez and Rent the Runway”s revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Zumiez	$889.20 million	0.50	-$1.71 million	$0.48	54.35
Rent the Runway	$306.20 million	0.65	-$69.90 million	($2.92)	-2.05

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

Analyst Ratings

This is a summary of current ratings and target prices for Zumiez and Rent the Runway, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Zumiez	0	2	0	1	2.67
Rent the Runway	1	2	0	0	1.67

Zumiez currently has a consensus price target of $18.00, suggesting a potential downside of 31.01%. Given Zumiez’s stronger consensus rating and higher possible upside, equities analysts plainly believe Zumiez is more favorable than Rent the Runway.

Insider and Institutional Ownership

95.5% of Zumiez shares are owned by institutional investors. Comparatively, 73.1% of Rent the Runway shares are owned by institutional investors. 20.3% of Zumiez shares are owned by insiders. Comparatively, 8.2% of Rent the Runway shares are owned by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock will outperform the market over the long term.

Profitability

This table compares Zumiez and Rent the Runway’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Zumiez	0.94%	2.33%	1.14%
Rent the Runway	3.37%	N/A	-36.65%

Risk and Volatility

Zumiez has a beta of 0.89, meaning that its share price is 11% less volatile than the S&P 500. Comparatively, Rent the Runway has a beta of 1.26, meaning that its share price is 26% more volatile than the S&P 500.

Summary

Zumiez beats Rent the Runway on 11 of the 14 factors compared between the two stocks.

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.

About Rent the Runway

Rent the Runway, Inc. operates shared designer closet in the United States. The company offers evening wear and accessories, ready-to-wear, workwear, denim, casual, maternity, outerwear, blouses, knitwear, loungewear, jewelry, handbags, activewear, and ski wear under subscription, rental, and resale offering. It also engages in the software development and support activities. Rent the Runway, Inc. was incorporated in 2009 and is headquartered in Brooklyn, New York.