Comparing RealReal (NASDAQ:REAL) & Central Garden & Pet (NASDAQ:CENTA)

RealReal (NASDAQ:REAL) and Central Garden & Pet (NASDAQ:CENTA) are both small-cap consumer discretionary companies, but which is the better business? We will compare the two businesses based on the strength of their earnings, institutional ownership, dividends, risk, profitability, analyst recommendations and valuation.

Analyst Ratings

This is a summary of recent ratings for RealReal and Central Garden & Pet, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
RealReal	0	1	4	0	2.80
Central Garden & Pet	0	4	1	0	2.20

RealReal presently has a consensus price target of $11.70, indicating a potential upside of 10.07%. Central Garden & Pet has a consensus price target of $38.67, indicating a potential upside of 30.94%. Given Central Garden & Pet’s higher possible upside, analysts clearly believe Central Garden & Pet is more favorable than RealReal.

Insider and Institutional Ownership

64.7% of RealReal shares are owned by institutional investors. Comparatively, 50.8% of Central Garden & Pet shares are owned by institutional investors. 9.0% of RealReal shares are owned by insiders. Comparatively, 20.3% of Central Garden & Pet shares are owned by insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock is poised for long-term growth.

Valuation & Earnings

This table compares RealReal and Central Garden & Pet”s revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
RealReal	$636.97 million	1.92	-$134.20 million	($1.06)	-10.03
Central Garden & Pet	$3.20 billion	0.58	$107.98 million	$2.20	13.42

Central Garden & Pet has higher revenue and earnings than RealReal. RealReal is trading at a lower price-to-earnings ratio than Central Garden & Pet, indicating that it is currently the more affordable of the two stocks.

Volatility and Risk

RealReal has a beta of 2.5, meaning that its stock price is 150% more volatile than the S&P 500. Comparatively, Central Garden & Pet has a beta of 0.66, meaning that its stock price is 34% less volatile than the S&P 500.

Profitability

This table compares RealReal and Central Garden & Pet’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
RealReal	-5.55%	N/A	-8.90%
Central Garden & Pet	4.44%	10.77%	4.65%

Summary

Central Garden & Pet beats RealReal on 9 of the 14 factors compared between the two stocks.

About RealReal

The RealReal, Inc. operates an online marketplace for resale luxury goods in the United State. The company offers various product categories, including women's fashion, men's fashion, jewelry, and watches. It primarily sells products through online marketplace and retail stores. The company was incorporated in 2011 and is headquartered in San Francisco, California.

About Central Garden & Pet

Central Garden & Pet Co. engages in the production and distribution of branded and private label products for the lawn, garden, and pet supplies markets. It operates through the Pet and Garden segments. The Pet segment focuses on dog and cat supplies such as dog treats and chews, toys, pet beds and containment, grooming products, waste management and training pads, supplies for aquatics, small animals, reptiles and pet birds including toys, cages and habitats, bedding, food and supplements, products for equine and livestock, animal and household health and insect control products, live fish, and small animals, as well as outdoor cushions. The Garden segment includes lawn and garden consumables such as grass, vegetable, flower and herb seed, wild bird feed, bird houses and other birding accessories, weed, grass, and other herbicides, insecticide and pesticide products, fertilizers, and live plants. The company was founded by William E. Brown in 1980 and is headquartered in Walnut Creek, CA.