RideNow Group (NASDAQ:RDNW – Get Free Report) and Driven Brands (NASDAQ:DRVN – Get Free Report) are both small-cap consumer discretionary companies, but which is the better business? We will contrast the two businesses based on the strength of their valuation, dividends, earnings, analyst recommendations, profitability, institutional ownership and risk.
Analyst Ratings
This is a breakdown of recent ratings and target prices for RideNow Group and Driven Brands, as provided by MarketBeat.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score | |
| RideNow Group | 1 | 2 | 0 | 0 | 1.67 |
| Driven Brands | 2 | 7 | 6 | 2 | 2.47 |
RideNow Group currently has a consensus price target of $8.50, suggesting a potential upside of 60.38%. Driven Brands has a consensus price target of $16.23, suggesting a potential upside of 39.79%. Given RideNow Group’s higher probable upside, analysts clearly believe RideNow Group is more favorable than Driven Brands.
Risk and Volatility
Insider & Institutional Ownership
66.1% of RideNow Group shares are owned by institutional investors. Comparatively, 77.1% of Driven Brands shares are owned by institutional investors. 55.3% of RideNow Group shares are owned by company insiders. Comparatively, 4.4% of Driven Brands shares are owned by company insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company will outperform the market over the long term.
Profitability
This table compares RideNow Group and Driven Brands’ net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets | |
| RideNow Group | -0.76% | N/A | -1.17% |
| Driven Brands | 8.61% | 24.13% | 5.03% |
Earnings and Valuation
This table compares RideNow Group and Driven Brands”s revenue, earnings per share and valuation.
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio | |
| RideNow Group | $1.08 billion | 0.19 | -$52.40 million | ($0.23) | -23.04 |
| Driven Brands | $1.86 billion | 1.03 | $140.16 million | $1.04 | 11.16 |
Driven Brands has higher revenue and earnings than RideNow Group. RideNow Group is trading at a lower price-to-earnings ratio than Driven Brands, indicating that it is currently the more affordable of the two stocks.
Summary
Driven Brands beats RideNow Group on 12 of the 15 factors compared between the two stocks.
About RideNow Group
RumbleOn, Inc. primarily operates as a powersports retailer in the United States. It operates in two segments, Powersports and Vehicle Transportation Services. The Powersports segment provides new and pre-owned motorcycles, all-terrain vehicles, utility terrain or side-by-side vehicles, personal watercraft, snowmobiles, and other powersports products. It also offers parts, apparel, accessories, finance and insurance products and services, and aftermarket products, as well as repair and maintenance services. The Vehicle Transportation Services segment provides asset-light transportation brokerage services facilitating automobile transportation. The company was formerly known as Smart Server, Inc. and changed its name to RumbleOn, Inc. in February 2017. The company was incorporated in 2013 and is based in Irving, Texas.
About Driven Brands
Driven Brands Holdings Inc., together with its subsidiaries, provides automotive services to retail and commercial customers in the United States, Canada, and internationally. It offers various services, such as paint, collision, glass, repair, car wash, oil change, and maintenance services. The company also distributes automotive parts, including radiators, air conditioning components, and exhaust products to automotive repair shops, auto parts stores, body shops, and other auto repair outlets; windshields and glass accessories through a network of distribution centers; and consumable products, such as oil filters and wiper blades, as well as training services to repair and maintenance, and paint and collision shops. It sells its products and services under the CARSTAR, IMO, MAACO, Meineke Car Care Centers, PH Vitres D’Autos, Take 5 Oil Change, Take 5 Car Wash, Auto Glass Now, Fix Auto USA, and 1-800-Radiator & A/C, Spire Supply, and Automotive Training Institute brands. The company was founded in 1972 and is headquartered in Charlotte, North Carolina.
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