RealReal (NASDAQ:REAL) and Central Garden & Pet (NASDAQ:CENT) Financial Analysis

Central Garden & Pet (NASDAQ:CENT) and RealReal (NASDAQ:REAL) are both consumer discretionary companies, but which is the superior business? We will compare the two companies based on the strength of their earnings, analyst recommendations, institutional ownership, dividends, profitability, valuation and risk.

Volatility & Risk

Central Garden & Pet has a beta of 0.69, suggesting that its share price is 31% less volatile than the S&P 500. Comparatively, RealReal has a beta of 2.67, suggesting that its share price is 167% more volatile than the S&P 500.

Insider and Institutional Ownership

16.1% of Central Garden & Pet shares are held by institutional investors. Comparatively, 64.7% of RealReal shares are held by institutional investors. 8.2% of Central Garden & Pet shares are held by company insiders. Comparatively, 9.0% of RealReal shares are held by company 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.

Profitability

This table compares Central Garden & Pet and RealReal’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Central Garden & Pet	5.04%	10.99%	4.75%
RealReal	-6.03%	N/A	-0.63%

Analyst Recommendations

This is a breakdown of recent recommendations and price targets for Central Garden & Pet and RealReal, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Central Garden & Pet	0	3	1	1	2.60
RealReal	1	2	5	1	2.67

Central Garden & Pet currently has a consensus price target of $42.50, suggesting a potential upside of 15.58%. RealReal has a consensus price target of $18.06, suggesting a potential upside of 98.93%. Given RealReal’s stronger consensus rating and higher possible upside, analysts clearly believe RealReal is more favorable than Central Garden & Pet.

Valuation & Earnings

This table compares Central Garden & Pet and RealReal”s top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Central Garden & Pet	$3.13 billion	0.73	$162.84 million	$2.45	15.01
RealReal	$692.84 million	1.56	-$41.80 million	($1.09)	-8.33

Central Garden & Pet has higher revenue and earnings than RealReal. RealReal is trading at a lower price-to-earnings ratio than Central Garden & Pet, indicating that it is currently the more affordable of the two stocks.

About Central Garden & Pet

Central Garden & Pet Co. engages in the production and distribution of branded and private label products for the lawn, garden, and pet supplies markets. It operates through the Pet and Garden segments. The Pet segment focuses on dog and cat supplies such as dog treats and chews, toys, pet beds and containment, grooming products, waste management and training pads, supplies for aquatics, small animals, reptiles and pet birds including toys, cages and habitats, bedding, food and supplements, products for equine and livestock, animal and household health and insect control products, live fish, and small animals, as well as outdoor cushions. The Garden segment includes lawn and garden consumables such as grass, vegetable, flower and herb seed, wild bird feed, bird houses and other birding accessories, weed, grass, and other herbicides, insecticide and pesticide products, fertilizers, and live plants. The company was founded by William E. Brown in 1980 and is headquartered in Walnut Creek, CA.

About RealReal

The RealReal, Inc. operates an online marketplace for resale luxury goods in the United State. The company offers various product categories, including women's fashion, men's fashion, jewelry, and watches. It primarily sells products through online marketplace and retail stores. The company was incorporated in 2011 and is headquartered in San Francisco, California.