Comparing Ermenegildo Zegna (NYSE:ZGN) & Rent the Runway (NASDAQ:RENT)

Ermenegildo Zegna (NYSE:ZGN) and Rent the Runway (NASDAQ:RENT) are both retail/wholesale companies, but which is the superior investment? We will contrast the two businesses based on the strength of their risk, institutional ownership, analyst recommendations, earnings, profitability, valuation and dividends.

Analyst Recommendations

This is a summary of current ratings and target prices for Ermenegildo Zegna and Rent the Runway, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Ermenegildo Zegna	0	3	4	0	2.57
Rent the Runway	1	2	0	0	1.67

Ermenegildo Zegna currently has a consensus target price of $11.73, suggesting a potential upside of 27.14%. Given Ermenegildo Zegna’s stronger consensus rating and higher probable upside, research analysts plainly believe Ermenegildo Zegna is more favorable than Rent the Runway.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
Ermenegildo Zegna	N/A	N/A	N/A
Rent the Runway	3.37%	N/A	-36.65%

Insider and Institutional Ownership

12.9% of Ermenegildo Zegna shares are owned by institutional investors. Comparatively, 73.1% of Rent the Runway shares are owned by institutional investors. 1.2% of Ermenegildo Zegna shares are owned by company insiders. Comparatively, 8.2% of Rent the Runway shares are owned by company insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock is poised for long-term growth.

Earnings & Valuation

This table compares Ermenegildo Zegna and Rent the Runway”s revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Ermenegildo Zegna	$2.11 billion	1.78	$83.41 million	N/A	N/A
Rent the Runway	$306.20 million	0.49	-$69.90 million	($2.92)	-1.55

Ermenegildo Zegna has higher revenue and earnings than Rent the Runway.

Volatility and Risk

Ermenegildo Zegna has a beta of 0.7, indicating that its stock price is 30% less volatile than the S&P 500. Comparatively, Rent the Runway has a beta of 1.28, indicating that its stock price is 28% more volatile than the S&P 500.

Summary

Ermenegildo Zegna beats Rent the Runway on 7 of the 11 factors compared between the two stocks.

About Ermenegildo Zegna

Ermenegildo Zegna N.V., together with its subsidiaries, designs, manufactures, markets, and distributes luxury menswear, footwear, leather goods, and other accessories under the Zegna and the Thom Browne brands. It provides luxury leisurewear for men; formal suits, tuxedos, shirts, blazers, formal overcoats, and accessories; leather accessories comprising shoes, bags, belts, and small leather accessories; and fragrances. The company also offers luxury womenswear and childrenswear under the Thom Browne brand, as well as provides eyewear, cufflinks and jewelry, watches, underwear, and beachwear manufactured by third parties under licenses. It serves customers through its retail stores and online channels in Europe, the Middle East, Africa, North America, Latin America, the Asia Pacific, and internationally. The company was founded in 1910 and is based in Trivero, Italy. Ermenegildo Zegna N.V. operates as a subsidiary of Monterubello Societa’ Semplice.

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.