Grove Collaborative (NYSE:GROV) & RH (NYSE:RH) Critical Contrast

Grove Collaborative (NYSE:GROV) and RH (NYSE:RH) are both consumer staples companies, but which is the superior stock? We will contrast the two companies based on the strength of their dividends, profitability, valuation, institutional ownership, risk, earnings and analyst recommendations.

Earnings and Valuation

This table compares Grove Collaborative and RH”s gross revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Grove Collaborative	$173.72 million	0.33	-$11.72 million	($0.33)	-4.09
RH	$3.44 billion	0.69	$124.79 million	$6.31	19.89

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

Insider and Institutional Ownership

91.6% of Grove Collaborative shares are owned by institutional investors. Comparatively, 90.2% of RH shares are owned by institutional investors. 29.4% of Grove Collaborative shares are owned by company insiders. Comparatively, 27.0% of RH shares are owned by company 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.

Analyst Recommendations

This is a breakdown of current recommendations for Grove Collaborative and RH, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Grove Collaborative	1	1	1	0	2.00
RH	5	8	7	0	2.10

Grove Collaborative currently has a consensus target price of $1.60, suggesting a potential upside of 18.52%. RH has a consensus target price of $176.47, suggesting a potential upside of 40.60%. Given RH’s stronger consensus rating and higher probable upside, analysts clearly believe RH is more favorable than Grove Collaborative.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
Grove Collaborative	-6.74%	N/A	-20.79%
RH	3.63%	-567.82%	2.62%

Volatility and Risk

Grove Collaborative has a beta of 1.21, indicating that its stock price is 21% more volatile than the S&P 500. Comparatively, RH has a beta of 2.1, indicating that its stock price is 110% more volatile than the S&P 500.

Summary

RH beats Grove Collaborative on 11 of the 14 factors compared between the two stocks.

About Grove Collaborative

Grove Collaborative Holdings, Inc. operates as a plastic neutral consumer products retailer in the United States. It offers household, personal care, beauty, and other consumer products through retail channels, third parties, direct-to-consumer platform, and mobile applications, as well as online store. The company is headquartered in San Francisco, California.

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.