Head to Head Analysis: Xcel Brands (NASDAQ:XELB) and Rent the Runway (NASDAQ:RENT)

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

Analyst Recommendations

This is a breakdown of recent ratings and price targets for Rent the Runway and Xcel Brands, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Rent the Runway	1	0	0	0	1.00
Xcel Brands	1	0	1	0	2.00

Xcel Brands has a consensus price target of $3.00, indicating a potential upside of 73.41%. Given Xcel Brands’ stronger consensus rating and higher possible upside, analysts clearly believe Xcel Brands is more favorable than Rent the Runway.

Volatility & Risk

Rent the Runway has a beta of 1.19, meaning that its share price is 19% more volatile than the S&P 500. Comparatively, Xcel Brands has a beta of 1.2, meaning that its share price is 20% more volatile than the S&P 500.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
Rent the Runway	8.51%	N/A	-30.10%
Xcel Brands	-361.04%	-83.71%	-34.96%

Insider and Institutional Ownership

73.1% of Rent the Runway shares are held by institutional investors. Comparatively, 18.5% of Xcel Brands shares are held by institutional investors. 0.4% of Rent the Runway shares are held by company insiders. Comparatively, 29.5% of Xcel Brands shares are held by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock is poised for long-term growth.

Valuation & Earnings

This table compares Rent the Runway and Xcel Brands”s gross revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Rent the Runway	$329.80 million	0.35	$22.60 million	$6.49	0.53
Xcel Brands	$4.94 million	2.12	-$17.46 million	($4.65)	-0.37

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

Summary

Rent the Runway beats Xcel Brands on 8 of the 14 factors compared between the two stocks.

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.

About Xcel Brands

Xcel Brands, Inc., together with its subsidiaries, operates as a media and consumer products company in the United States. The company designs, produces, markets, wholesales, and sells branded apparel, footwear, accessories, jewelry, home goods, and other consumer products; and acquires consumer lifestyle brands, including the Isaac Mizrahi, the LOGO by Lori Goldstein, the Judith Ripka, the Halston brand, the C Wonder, the TowerHill by Christie Brinkley brand (the CB brand), and other brands, as well as manages the Longaberger brand. It licenses its brands to third parties; and designs, produces, markets, and distributes through an omni-channel retail sales strategy, which include distribution through interactive television, digital live-stream shopping, brick-and-mortar retail, and e-commerce channels. The company also offers live streaming, social media and other marketing, and public relations support for its brands. In addition, it markets its brands through www.isaacmizrahi.com; www.halston.com; www.judithripka.com; www.cwonder.com; www.lorigoldstein.com; and www.longaberger.com. Xcel Brands, Inc. was founded in 2011 and is headquartered in New York, New York.