Comparing Rent the Runway (NASDAQ:RENT) & Fossil Group (NASDAQ:FOSL)

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

Profitability

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

	Net Margins	Return on Equity	Return on Assets
Fossil Group	-7.81%	-46.78%	-7.42%
Rent the Runway	3.37%	N/A	-36.65%

Valuation and Earnings

This table compares Fossil Group 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
Fossil Group	$1.00 billion	0.23	-$78.30 million	($1.46)	-2.73
Rent the Runway	$314.50 million	0.50	-$69.90 million	($2.92)	-1.60

Rent the Runway has lower revenue, but higher earnings than Fossil Group. Fossil Group 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.

Institutional & Insider Ownership

61.1% of Fossil Group shares are owned by institutional investors. Comparatively, 73.1% of Rent the Runway shares are owned by institutional investors. 2.9% of Fossil Group 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 large money managers, endowments and hedge funds believe a company will outperform the market over the long term.

Analyst Ratings

This is a breakdown of current ratings and price targets for Fossil Group and Rent the Runway, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Fossil Group	1	1	2	0	2.25
Rent the Runway	1	2	0	0	1.67

Fossil Group currently has a consensus target price of $7.00, suggesting a potential upside of 75.88%. Given Fossil Group’s stronger consensus rating and higher possible upside, equities analysts clearly believe Fossil Group is more favorable than Rent the Runway.

Volatility and Risk

Fossil Group has a beta of 1.68, indicating that its share price is 68% more volatile than the S&P 500. Comparatively, Rent the Runway has a beta of 1.28, indicating that its share price is 28% more volatile than the S&P 500.

About Fossil Group

Fossil Group, Inc., together with its subsidiaries, designs, develops, markets, and distributes consumer fashion accessories in the United States, Europe, Asia, and internationally. The company’s products include traditional watches, smartwatches, jewelry, handbags, small leather goods, belts, and sunglasses. It also manufactures and distributes private label brands, as well as branded products purchased for resell in other branded retail stores. The company offers its products under its proprietary brands, such as FOSSIL, SKAGEN, MICHELE, RELIC, and ZODIAC; and under the licensed brands, including ARMANI EXCHANGE, DIESEL, DKNY, EMPORIO ARMANI, KATE SPADE NEW YORK, MICHAEL KORS, TORY BURCH, and Skechers. The company sells its products through company-owned retail and outlet stores, department and specialty retail stores, mass market stores, e-commerce sites, licensed and franchised FOSSIL retail stores, and retail concessions, as well as sells its products on airlines. The company was formerly known as Fossil, Inc. and changed its name to Fossil Group, Inc. in May 2013. Fossil Group, Inc. was founded in 1984 and is headquartered in Richardson, Texas.

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.