Analyzing Victoria’s Secret & Co. (NYSE:VSCO) & Rent the Runway (NASDAQ:RENT)

Rent the Runway (NASDAQ:RENT) and Victoria’s Secret & Co. (NYSE:VSCO) are both retail/wholesale companies, but which is the better business? We will compare the two companies based on the strength of their institutional ownership, valuation, risk, analyst recommendations, profitability, dividends and earnings.

Profitability

This table compares Rent the Runway and Victoria’s Secret & Co.’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Rent the Runway	6.85%	N/A	-32.17%
Victoria’s Secret & Co.	2.45%	33.55%	5.14%

Volatility and Risk

Rent the Runway has a beta of 1.23, suggesting that its share price is 23% more volatile than the S&P 500. Comparatively, Victoria’s Secret & Co. has a beta of 2.18, suggesting that its share price is 118% more volatile than the S&P 500.

Earnings and Valuation

This table compares Rent the Runway and Victoria’s Secret & Co.”s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Rent the Runway	$329.80 million	0.48	$22.60 million	$0.48	9.92
Victoria’s Secret & Co.	$6.55 billion	0.62	$161.00 million	$1.86	27.07

Victoria’s Secret & Co. has higher revenue and earnings than Rent the Runway. Rent the Runway is trading at a lower price-to-earnings ratio than Victoria’s Secret & Co., indicating that it is currently the more affordable of the two stocks.

Analyst Ratings

This is a summary of current recommendations and price targets for Rent the Runway and Victoria’s Secret & Co., as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Rent the Runway	1	0	0	0	1.00
Victoria’s Secret & Co.	0	5	7	1	2.69

Victoria’s Secret & Co. has a consensus target price of $61.80, suggesting a potential upside of 22.72%. Given Victoria’s Secret & Co.’s stronger consensus rating and higher possible upside, analysts plainly believe Victoria’s Secret & Co. is more favorable than Rent the Runway.

Insider and Institutional Ownership

73.1% of Rent the Runway shares are held by institutional investors. Comparatively, 90.3% of Victoria’s Secret & Co. shares are held by institutional investors. 8.2% of Rent the Runway shares are held by company insiders. Comparatively, 0.5% of Victoria’s Secret & Co. shares are held by company insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock is poised for long-term growth.

Summary

Victoria’s Secret & Co. beats Rent the Runway on 13 of the 15 factors compared between the two stocks.

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.

About Victoria’s Secret & Co.

Victoria’s Secret & Co. operates as a lingerie, clothing and beauty retailer. It offers bras, panties, lingerie, pajamas, sleep, sport and swim apparel, and beauty products. The company was founded in 1963 and is headquartered in Reynoldsburg, OH.