Analyzing Xcel Brands (NASDAQ:XELB) and Rent the Runway (NASDAQ:RENT)

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

Valuation and Earnings

This table compares Xcel Brands 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
Xcel Brands	$4.94 million	2.19	-$17.46 million	($4.65)	-0.38
Rent the Runway	$329.80 million	0.33	$22.60 million	$6.49	0.50

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.

Profitability

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

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

Institutional and Insider Ownership

18.6% of Xcel Brands shares are owned by institutional investors. Comparatively, 73.1% of Rent the Runway shares are owned by institutional investors. 29.5% of Xcel Brands 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 endowments, large money managers and hedge funds believe a company will outperform the market over the long term.

Volatility & Risk

Xcel Brands has a beta of 1.18, meaning that its share price is 18% more volatile than the S&P 500. Comparatively, Rent the Runway has a beta of 1.17, meaning that its share price is 17% more volatile than the S&P 500.

Analyst Recommendations

This is a summary of current ratings and recommmendations for Xcel Brands and Rent the Runway, as reported by MarketBeat.com.

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

Xcel Brands presently has a consensus price target of $3.00, indicating a potential upside of 67.60%. Given Xcel Brands’ stronger consensus rating and higher probable upside, research analysts clearly believe Xcel Brands is more favorable than Rent the Runway.

Summary

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

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.

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.