Financial Review: Rent the Runway (NASDAQ:RENT) & Levi Strauss & Co. (NYSE:LEVI)

Levi Strauss & Co. (NYSE:LEVI) and Rent the Runway (NASDAQ:RENT) are both retail/wholesale companies, but which is the better investment? We will compare the two companies based on the strength of their earnings, institutional ownership, analyst recommendations, risk, valuation, dividends and profitability.

Analyst Ratings

This is a breakdown of recent ratings for Levi Strauss & Co. and Rent the Runway, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Levi Strauss & Co.	0	3	12	0	2.80
Rent the Runway	1	0	0	0	1.00

Levi Strauss & Co. presently has a consensus price target of $27.46, suggesting a potential upside of 11.91%. Given Levi Strauss & Co.’s stronger consensus rating and higher possible upside, analysts clearly believe Levi Strauss & Co. is more favorable than Rent the Runway.

Insider & Institutional Ownership

69.1% of Levi Strauss & Co. shares are owned by institutional investors. Comparatively, 73.1% of Rent the Runway shares are owned by institutional investors. 1.1% of Levi Strauss & Co. shares are owned by company insiders. Comparatively, 0.4% of Rent the Runway shares are owned by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a company is poised for long-term growth.

Valuation and Earnings

This table compares Levi Strauss & Co. and Rent the Runway”s gross revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Levi Strauss & Co.	$6.28 billion	1.50	$578.10 million	$1.62	15.15
Rent the Runway	$329.80 million	0.31	$22.60 million	$6.49	0.46

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

Volatility and Risk

Levi Strauss & Co. has a beta of 1.33, meaning that its share price is 33% more volatile than the S&P 500. Comparatively, Rent the Runway has a beta of 1.19, meaning that its share price is 19% more volatile than the S&P 500.

Profitability

This table compares Levi Strauss & Co. and Rent the Runway’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Levi Strauss & Co.	9.66%	25.79%	8.61%
Rent the Runway	8.51%	N/A	-30.10%

Summary

Levi Strauss & Co. beats Rent the Runway on 12 of the 14 factors compared between the two stocks.

About Levi Strauss & Co.

Levi Strauss & Co. engages in the design, marketing, and sale of apparel products. The company offers jeans, casual and dress pants, tops, shorts, skirts, jackets, footwear, and related accessories. It operates through the following geographical segments: Americas, Europe, and Asia. The company was founded by Levi Strauss in 1853 and is headquartered in San Francisco, CA.

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.