Critical Analysis: School Specialty (OTCMKTS:SCOO) & Advantage Solutions (NASDAQ:ADV)

School Specialty (OTCMKTS:SCOO) and Advantage Solutions (NASDAQ:ADV) are both consumer discretionary companies, but which is the better stock? We will contrast the two businesses based on the strength of their analyst recommendations, valuation, risk, profitability, institutional ownership, earnings and dividends.

Valuation and Earnings

This table compares School Specialty and Advantage Solutions”s top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
School Specialty	N/A	N/A	N/A	N/A	N/A
Advantage Solutions	$3.57 billion	0.16	-$326.96 million	($0.94)	-1.85

School Specialty has higher earnings, but lower revenue than Advantage Solutions.

Profitability

This table compares School Specialty and Advantage Solutions’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
School Specialty	N/A	N/A	N/A
Advantage Solutions	-8.72%	-39.45%	-9.63%

Insider and Institutional Ownership

49.8% of Advantage Solutions shares are owned by institutional investors. 41.0% of School Specialty shares are owned by company insiders. Comparatively, 7.9% of Advantage Solutions shares are owned by company insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock will outperform the market over the long term.

Analyst Recommendations

This is a summary of recent recommendations for School Specialty and Advantage Solutions, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
School Specialty	0	0	0	0	0.00
Advantage Solutions	0	0	1	0	3.00

Advantage Solutions has a consensus price target of $2.25, indicating a potential upside of 29.31%. Given Advantage Solutions’ stronger consensus rating and higher probable upside, analysts clearly believe Advantage Solutions is more favorable than School Specialty.

Summary

Advantage Solutions beats School Specialty on 5 of the 9 factors compared between the two stocks.

About School Specialty

School Specialty, Inc., together with its subsidiaries, provides supplies, furniture, technology products, and curriculum solutions to the education marketplace in the United States and Canada. The company’s Distribution segment offers office products, classroom supplies, janitorial and sanitation supplies, school equipment, school and student safety and security products and services, physical education products, art supplies and paper, and others; physical education programs, solutions, resources, and equipment to improve student and staff wellness; and science education products, supplemental curriculum, and lab equipment and supplies. It also provides supplemental learning materials, teaching resources, classroom libraries, and manipulatives; intervention products; educator-inspired quality audio technology products, including multi-media, audio visual, and presentation equipment for the PreK-12 education market; and school-specific furniture and equipment for in-school, in-classroom, and outdoor use, as well as project management and design services for school refurbishment and new construction projects. This segment offers its products under the Childcraft, Sax Arts & Crafts, Califone, Classroom Select, Sportime, Abilitations, Hammond & Stephens, Brodhead Garrett, School Smart, Royal Seating, Projects by Design, CPO Science, Frey Scientific, Educator’s Publishing Service, Wordly Wise 3000, Explode the Code, ThinkMath!, SSI Guardian, Making Connections, S.P.I.R.E, Buckle Down, and Coach brands. Its Curriculum segment develops and sells standards-based curriculum science products, such as laboratory supplies and equipment, and furniture under the FOSS, Frey Scientific, Delta Science Module, Delta Education, CPO Science, and Neo/SCI brand names. The company offers its products through its sales force, catalogs, and its proprietary e-commerce Websites. School Specialty, Inc. was founded in 1959 and is headquartered in Greenville, Wisconsin.

About Advantage Solutions

Advantage Solutions Inc. provides business solutions to consumer goods manufacturers and retailers in North America and internationally. It operates in two segments, Sales and Marketing. The Sales segment offers brand-centric services, such as headquarter relationship management; analytics, insights, and intelligence; and brand-centric merchandising services. This segment also provides retailer-centric services comprising retailer-centric merchandising and in-store media services. The Marketing segment offers brand-centric services, including shopper and consumer marketing, and brand experiential services; retailer-centric services, such as retail experiential and private label services; and digital marketing, and digital media and advertising services. The company was formerly known as Karman Holding Corp. and changed its name to Advantage Solutions Inc. in March 2016. The company was founded in 1987 and is headquartered in Irvine, California.