Rent the Runway (NASDAQ:RENT – Get Free Report) and Winmark (NASDAQ:WINA – Get Free Report) are both small-cap consumer discretionary companies, but which is the superior investment? We will contrast the two businesses based on the strength of their risk, valuation, institutional ownership, earnings, dividends, analyst recommendations and profitability.
Analyst Ratings
This is a summary of recent recommendations for Rent the Runway and Winmark, 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 |
| Winmark | 0 | 1 | 0 | 0 | 2.00 |
Risk and Volatility
Rent the Runway has a beta of 1.18, indicating that its stock price is 18% more volatile than the S&P 500. Comparatively, Winmark has a beta of 0.54, indicating that its stock price is 46% less volatile than the S&P 500.
Earnings & Valuation
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio | |
| Rent the Runway | $329.80 million | 0.25 | $22.60 million | $6.49 | 0.38 |
| Winmark | $86.06 million | 12.87 | $41.65 million | $11.02 | 27.99 |
Winmark has lower revenue, but higher earnings than Rent the Runway. Rent the Runway is trading at a lower price-to-earnings ratio than Winmark, indicating that it is currently the more affordable of the two stocks.
Profitability
This table compares Rent the Runway and Winmark’s net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets | |
| Rent the Runway | 8.51% | N/A | -30.10% |
| Winmark | 47.09% | -99.47% | 103.54% |
Insider & Institutional Ownership
73.1% of Rent the Runway shares are held by institutional investors. Comparatively, 73.3% of Winmark shares are held by institutional investors. 0.4% of Rent the Runway shares are held by insiders. Comparatively, 10.4% of Winmark shares are held by insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a company will outperform the market over the long term.
Summary
Winmark beats Rent the Runway on 9 of the 12 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 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.
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