Analyzing Ross Stores (NASDAQ:ROST) and Chewy (NYSE:CHWY)

Chewy (NYSE:CHWYGet Free Report) and Ross Stores (NASDAQ:ROSTGet Free Report) are both consumer discretionary companies, but which is the better investment? We will compare the two businesses based on the strength of their risk, valuation, institutional ownership, analyst recommendations, dividends, earnings and profitability.

Institutional and Insider Ownership

93.1% of Chewy shares are held by institutional investors. Comparatively, 86.9% of Ross Stores shares are held by institutional investors. 0.3% of Chewy shares are held by insiders. Comparatively, 2.1% of Ross Stores 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.

Profitability

This table compares Chewy and Ross Stores’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Chewy 2.09% 60.88% 7.83%
Ross Stores 10.85% 39.29% 15.79%

Valuation & Earnings

This table compares Chewy and Ross Stores”s top-line revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Chewy $13.07 billion 0.65 $222.80 million $0.66 31.23
Ross Stores $22.75 billion 3.18 $2.15 billion $8.26 27.43

Ross Stores has higher revenue and earnings than Chewy. Ross Stores is trading at a lower price-to-earnings ratio than Chewy, indicating that it is currently the more affordable of the two stocks.

Risk & Volatility

Chewy has a beta of 1.42, meaning that its share price is 42% more volatile than the S&P 500. Comparatively, Ross Stores has a beta of 0.85, meaning that its share price is 15% less volatile than the S&P 500.

Analyst Ratings

This is a breakdown of recent ratings for Chewy and Ross Stores, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Chewy 1 7 17 1 2.69
Ross Stores 0 6 15 0 2.71

Chewy currently has a consensus price target of $30.64, suggesting a potential upside of 48.61%. Ross Stores has a consensus price target of $263.76, suggesting a potential upside of 16.40%. Given Chewy’s higher possible upside, analysts plainly believe Chewy is more favorable than Ross Stores.

Summary

Ross Stores beats Chewy on 8 of the 15 factors compared between the two stocks.

About Chewy

(Get Free Report)

Chewy, Inc., together with its subsidiaries, engages in the pure play e-commerce business in the United States. It provides pet food and treats, pet supplies and pet medications, and other pet-health products, as well as pet services for dogs, cats, fish, birds, small pets, horses, and reptiles through its retail websites and mobile applications. The company was founded in 2010 and is based in Plantation, Florida.

About Ross Stores

(Get Free Report)

Ross Stores, Inc., together with its subsidiaries, operates off-price retail apparel and home fashion stores under the Ross Dress for Less and dd’s DISCOUNTS brand names in the United States. Its stores primarily offer apparel, accessories, footwear, and home fashions. The company’s Ross Dress for Less stores sell its products at department and specialty stores to middle income households; and dd’s DISCOUNTS stores sell its products at department and discount stores for households with moderate income. Ross Stores, Inc. was incorporated in 1957 and is headquartered in Dublin, California.

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