Rent the Runway (NASDAQ:RENT) versus CarParts.com (NASDAQ:PRTS) Financial Review

CarParts.com (NASDAQ:PRTS) and Rent the Runway (NASDAQ:RENT) are both small-cap consumer discretionary companies, but which is the superior stock? We will contrast the two businesses based on the strength of their valuation, risk, dividends, institutional ownership, analyst recommendations, profitability and earnings.

Risk and Volatility

CarParts.com has a beta of 0.71, meaning that its share price is 29% less volatile than the S&P 500. Comparatively, Rent the Runway has a beta of 1.18, meaning that its share price is 18% more volatile than the S&P 500.

Institutional and Insider Ownership

75.3% of CarParts.com shares are owned by institutional investors. Comparatively, 73.1% of Rent the Runway shares are owned by institutional investors. 6.6% of CarParts.com 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, large money managers and endowments believe a company will outperform the market over the long term.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
CarParts.com	-5.35%	-47.19%	-14.52%
Rent the Runway	8.51%	N/A	-30.10%

Analyst Recommendations

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

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
CarParts.com	1	1	0	0	1.50
Rent the Runway	1	0	0	0	1.00

CarParts.com currently has a consensus price target of $6.00, suggesting a potential downside of 35.48%. Given CarParts.com’s stronger consensus rating and higher probable upside, research analysts plainly believe CarParts.com is more favorable than Rent the Runway.

Earnings & Valuation

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

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
CarParts.com	$547.53 million	0.14	-$50.44 million	($4.33)	-2.15
Rent the Runway	$350.10 million	0.37	$22.60 million	$6.49	0.59

Rent the Runway has lower revenue, but higher earnings than CarParts.com. CarParts.com 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 CarParts.com on 7 of the 13 factors compared between the two stocks.

About CarParts.com

CarParts.com, Inc., together with its subsidiaries, operates as an online provider of aftermarket auto parts and accessories in the United States and the Philippines. It offers replacement parts, such as parts for the exterior of an automobile; mirror products; engine and chassis components, as well as other mechanical and electrical parts; and performance parts and accessories. The company sells its products to individual customers through its flagship website www.carparts.com and app; online marketplaces, including third-party auction sites and shopping portals; and auto parts wholesale distributors. The company was formerly known as U.S. Auto Parts Network, Inc. and changed its name to CarParts.com, Inc. in July 2020. CarParts.com, Inc. was incorporated in 1995 and is headquartered in Torrance, California.

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.