Contrasting Winmark (NASDAQ:WINA) and ThredUp (NASDAQ:TDUP)

ThredUp (NASDAQ:TDUP) and Winmark (NASDAQ:WINA) are both small-cap consumer discretionary companies, but which is the better stock? We will compare the two businesses based on the strength of their analyst recommendations, valuation, earnings, dividends, institutional ownership, risk and profitability.

Earnings and Valuation

This table compares ThredUp and Winmark”s gross revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
ThredUp	$310.81 million	0.91	-$20.21 million	($0.17)	-12.71
Winmark	$86.06 million	12.34	$41.65 million	$11.02	26.85

Winmark has lower revenue, but higher earnings than ThredUp. ThredUp is trading at a lower price-to-earnings ratio than Winmark, indicating that it is currently the more affordable of the two stocks.

Insider & Institutional Ownership

89.1% of ThredUp shares are owned by institutional investors. Comparatively, 73.3% of Winmark shares are owned by institutional investors. 23.1% of ThredUp shares are owned by insiders. Comparatively, 10.4% of Winmark shares are owned by insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a company will outperform the market over the long term.

Profitability

This table compares ThredUp and Winmark’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
ThredUp	-6.65%	-37.30%	-13.03%
Winmark	47.09%	-99.47%	103.54%

Analyst Recommendations

This is a breakdown of recent ratings for ThredUp and Winmark, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
ThredUp	1	0	4	0	2.60
Winmark	0	1	0	0	2.00

ThredUp presently has a consensus target price of $6.55, indicating a potential upside of 203.24%. Given ThredUp’s stronger consensus rating and higher possible upside, research analysts clearly believe ThredUp is more favorable than Winmark.

Risk and Volatility

ThredUp has a beta of 2.11, indicating that its stock price is 111% more volatile than the S&P 500. Comparatively, Winmark has a beta of 0.57, indicating that its stock price is 43% less volatile than the S&P 500.

Summary

ThredUp beats Winmark on 8 of the 14 factors compared between the two stocks.

About ThredUp

ThredUp Inc., together with its subsidiaries, operates an online resale platform in the United States and internationally. Its platform enables consumers to buy and sell primarily secondhand apparel, shoes, and accessories. ThredUp Inc. was incorporated in 2009 and is headquartered in Oakland, California.

About Winmark

Winmark Corporation, a resale company operates as a franchisor for small business in the United States and Canada. The company franchises retail stores concepts that buy, sell and trade merchandise. It also operates middle-market equipment leasing business. In addition, the company buys and sells used clothing and accessories geared toward the teenage and young adult market under Plato’s Closet brand; and operates stores which buys and sells used and new children’s clothing, toys, furniture, equipment, and accessories primarily to parents of children ages infant to 12 years under the Once Upon A Child brand. Further, it buys, sells, trades in, and used and new sporting goods, equipment, and accessories for various athletic activities including team sports, such as baseball/softball, hockey, football, lacrosse, and soccer, as well as fitness, ski/snowboard, golf, and others under the Play It Again Sports brand; and buys and sells used women’s apparel, shoes, and accessories under the Style Encore brand. Additionally, the company buys, sells, trades in, and used and new musical instruments, speakers, amplifiers, music-related electronics, and related accessories under the Music Go Round brand. Winmark Corporation was incorporated in 1988 and is headquartered in Minneapolis, Minnesota.