RideNow Group (NASDAQ:RDNW) versus Leslie’s (NASDAQ:LESL) Critical Analysis

RideNow Group (NASDAQ:RDNW) and Leslie’s (NASDAQ:LESL) are both small-cap consumer discretionary companies, but which is the superior business? We will compare the two companies based on the strength of their risk, valuation, earnings, dividends, institutional ownership, profitability and analyst recommendations.

Earnings & Valuation

This table compares RideNow Group and Leslie’s”s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
RideNow Group	$1.08 billion	0.17	-$52.40 million	($0.23)	-20.91
Leslie’s	$1.18 billion	0.00	-$236.97 million	($27.08)	-0.00

RideNow Group has higher earnings, but lower revenue than Leslie’s. RideNow Group is trading at a lower price-to-earnings ratio than Leslie’s, indicating that it is currently the more affordable of the two stocks.

Analyst Ratings

This is a summary of current ratings and price targets for RideNow Group and Leslie’s, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
RideNow Group	1	2	0	0	1.67
Leslie’s	2	4	1	0	1.86

RideNow Group currently has a consensus target price of $8.50, suggesting a potential upside of 76.72%. Leslie’s has a consensus target price of $2.85, suggesting a potential upside of 2,694.12%. Given Leslie’s’ stronger consensus rating and higher possible upside, analysts clearly believe Leslie’s is more favorable than RideNow Group.

Profitability

This table compares RideNow Group and Leslie’s’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
RideNow Group	-0.76%	N/A	-1.17%
Leslie’s	-21.24%	N/A	-8.96%

Insider & Institutional Ownership

66.1% of RideNow Group shares are held by institutional investors. 55.3% of RideNow Group shares are held by insiders. Comparatively, 0.5% of Leslie’s shares are held by insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock will outperform the market over the long term.

Volatility and Risk

RideNow Group has a beta of 1.29, indicating that its share price is 29% more volatile than the S&P 500. Comparatively, Leslie’s has a beta of 1.76, indicating that its share price is 76% more volatile than the S&P 500.

Summary

RideNow Group beats Leslie’s on 7 of the 13 factors compared between the two stocks.

About RideNow Group

RumbleOn, Inc. primarily operates as a powersports retailer in the United States. It operates in two segments, Powersports and Vehicle Transportation Services. The Powersports segment provides new and pre-owned motorcycles, all-terrain vehicles, utility terrain or side-by-side vehicles, personal watercraft, snowmobiles, and other powersports products. It also offers parts, apparel, accessories, finance and insurance products and services, and aftermarket products, as well as repair and maintenance services. The Vehicle Transportation Services segment provides asset-light transportation brokerage services facilitating automobile transportation. The company was formerly known as Smart Server, Inc. and changed its name to RumbleOn, Inc. in February 2017. The company was incorporated in 2013 and is based in Irving, Texas.

About Leslie’s

Leslie’s, Inc. operates as a direct-to-consumer pool and spa care brand in the United States. The company markets and sells pool and spa supplies and related products and services. It also offers various pool and spa maintenance items, such as chemicals, equipment and parts, cleaning and maintenance equipment, safety, recreational, and fitness related products. In addition, the company provides installation and repair services for pool and spa equipment. It also sells its products through e-commerce websites and third-party marketplaces. The company offers complimentary, commercial-grade in-store, water testing, and analysis services. It serves the residential, professional, and commercial consumers. Leslie’s, Inc. was founded in 1963 and is based in Phoenix, Arizona.