American Eagle Outfitters (NYSE:AEO – Get Free Report) and RideNow Group (NASDAQ:RDNW – Get Free Report) are both consumer discretionary companies, but which is the superior business? We will contrast the two companies based on the strength of their dividends, earnings, valuation, risk, analyst recommendations, profitability and institutional ownership.
Institutional & Insider Ownership
97.3% of American Eagle Outfitters shares are held by institutional investors. Comparatively, 66.1% of RideNow Group shares are held by institutional investors. 8.9% of American Eagle Outfitters shares are held by insiders. Comparatively, 55.3% of RideNow Group shares are held by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock is poised for long-term growth.
Profitability
This table compares American Eagle Outfitters and RideNow Group’s net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets | |
| American Eagle Outfitters | 5.91% | 23.63% | 9.59% |
| RideNow Group | -0.76% | N/A | -1.17% |
Earnings & Valuation
This table compares American Eagle Outfitters and RideNow Group”s gross revenue, earnings per share (EPS) and valuation.
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio | |
| American Eagle Outfitters | $5.50 billion | 0.61 | $191.98 million | $1.96 | 10.26 |
| RideNow Group | $1.08 billion | 0.19 | -$52.40 million | ($0.23) | -22.91 |
American Eagle Outfitters has higher revenue and earnings than RideNow Group. RideNow Group is trading at a lower price-to-earnings ratio than American Eagle Outfitters, indicating that it is currently the more affordable of the two stocks.
Volatility and Risk
American Eagle Outfitters has a beta of 1.28, indicating that its share price is 28% more volatile than the S&P 500. Comparatively, RideNow Group has a beta of 1.29, indicating that its share price is 29% more volatile than the S&P 500.
Analyst Ratings
This is a summary of current ratings and price targets for American Eagle Outfitters and RideNow Group, as provided by MarketBeat.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score | |
| American Eagle Outfitters | 1 | 12 | 2 | 0 | 2.07 |
| RideNow Group | 1 | 2 | 0 | 0 | 1.67 |
American Eagle Outfitters currently has a consensus target price of $19.55, indicating a potential downside of 2.85%. RideNow Group has a consensus target price of $8.50, indicating a potential upside of 61.29%. Given RideNow Group’s higher probable upside, analysts plainly believe RideNow Group is more favorable than American Eagle Outfitters.
Summary
American Eagle Outfitters beats RideNow Group on 11 of the 14 factors compared between the two stocks.
About American Eagle Outfitters
American Eagle Outfitters, Inc. operates as a multi-brand specialty retailer in the United States and internationally. The company provides jeans, apparel and accessories, and personal care products for women and men under the American Eagle brand; and intimates, apparel, activewear, and swim collections under the Aerie and OFFLINE by Aerie brands. It also offers menswear products under the Todd Snyder New York brand; and fashion clothing and accessories under the Unsubscribed brand. The company sells its products through own and licensed retail stores; concession-based shops-within-shops; and digital channels, such as www.ae.com, www.aerie.com, www.toddsnyder.com, and www.unsubscribed.com. American Eagle Outfitters, Inc. was founded in 1977 and is headquartered in Pittsburgh, Pennsylvania.
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.
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