Head-To-Head Analysis: RealReal (NASDAQ:REAL) & Advantage Solutions (NASDAQ:ADV)

RealReal (NASDAQ:REAL) and Advantage Solutions (NASDAQ:ADV) 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 analyst recommendations, earnings, risk, valuation, profitability, institutional ownership and dividends.

Volatility & Risk

RealReal has a beta of 2.56, indicating that its share price is 156% more volatile than the S&P 500. Comparatively, Advantage Solutions has a beta of 2.17, indicating that its share price is 117% more volatile than the S&P 500.

Insider & Institutional Ownership

64.7% of RealReal shares are owned by institutional investors. Comparatively, 49.8% of Advantage Solutions shares are owned by institutional investors. 9.0% of RealReal 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 large money managers, endowments and hedge funds believe a stock is poised for long-term growth.

Analyst Recommendations

This is a summary of current ratings for RealReal and Advantage Solutions, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
RealReal	1	1	4	0	2.50
Advantage Solutions	1	0	1	0	2.00

RealReal currently has a consensus target price of $11.70, indicating a potential upside of 23.81%. Advantage Solutions has a consensus target price of $2.25, indicating a potential upside of 52.03%. Given Advantage Solutions’ higher possible upside, analysts clearly believe Advantage Solutions is more favorable than RealReal.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
RealReal	-5.55%	N/A	-8.90%
Advantage Solutions	-8.72%	-39.45%	-9.63%

Valuation and Earnings

This table compares RealReal 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
RealReal	$600.48 million	1.81	-$134.20 million	($1.06)	-8.92
Advantage Solutions	$3.57 billion	0.14	-$326.96 million	($0.94)	-1.57

RealReal has higher earnings, but lower revenue than Advantage Solutions. RealReal is trading at a lower price-to-earnings ratio than Advantage Solutions, indicating that it is currently the more affordable of the two stocks.

Summary

RealReal beats Advantage Solutions on 10 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 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.