Head to Head Contrast: RH (NYSE:RH) and Warby Parker (NYSE:WRBY)

Warby Parker (NYSE:WRBY) and RH (NYSE:RH) are both mid-cap consumer staples companies, but which is the better investment? We will compare the two businesses based on the strength of their risk, profitability, dividends, analyst recommendations, earnings, institutional ownership and valuation.

Risk and Volatility

Warby Parker has a beta of 2.06, suggesting that its stock price is 106% more volatile than the S&P 500. Comparatively, RH has a beta of 2.09, suggesting that its stock price is 109% more volatile than the S&P 500.

Profitability

This table compares Warby Parker and RH’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Warby Parker	0.08%	1.96%	1.01%
RH	3.22%	-161.72%	2.70%

Insider & Institutional Ownership

93.2% of Warby Parker shares are held by institutional investors. Comparatively, 90.2% of RH shares are held by institutional investors. 18.2% of Warby Parker shares are held by insiders. Comparatively, 27.0% of RH shares are held by insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a company is poised for long-term growth.

Earnings & Valuation

This table compares Warby Parker and RH”s gross revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Warby Parker	$771.32 million	3.32	-$20.39 million	$0.01	2,418.60
RH	$3.18 billion	1.10	$72.41 million	$5.54	33.48

RH has higher revenue and earnings than Warby Parker. RH is trading at a lower price-to-earnings ratio than Warby Parker, indicating that it is currently the more affordable of the two stocks.

Analyst Ratings

This is a summary of current ratings and target prices for Warby Parker and RH, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Warby Parker	0	8	11	0	2.58
RH	3	9	9	0	2.29

Warby Parker presently has a consensus price target of $26.75, indicating a potential upside of 10.60%. RH has a consensus price target of $225.56, indicating a potential upside of 21.60%. Given RH’s higher probable upside, analysts plainly believe RH is more favorable than Warby Parker.

Summary

RH beats Warby Parker on 8 of the 14 factors compared between the two stocks.

About Warby Parker

Warby Parker Inc. provides eyewear products in the United States and Canada. The company offers eyeglasses, sunglasses, light-responsive lenses, blue-light-filtering lenses, non-prescription lenses, and contact lenses. It also provides accessories, such as cases, lenses kit with anti-fog spray, pouches, and anti-fog lens spray through its retail stores, website, and mobile apps. In addition, the company offers eye exams and vision tests. Warby Parker Inc. was incorporated in 2009 and is headquartered in New York, New York.

About RH

RH, together with its subsidiaries, operates as a retailer in the home furnishings market. The company offers products in various categories, including furniture, lighting, textiles, bathware, décor, outdoor and garden, baby, child, and teen furnishings. It provides its products through rh.com, rhbabyandchild.com, rhteen.com, rhmodern.com, and waterworks.com online channels, as well as operates RH Galleries, RH outlet stores, RH Guesthouse, and Waterworks showrooms in the United States, Canada, the United Kingdom, and Germany. The company was formerly known as Restoration Hardware Holdings, Inc. and changed its name to RH in January 2017. RH was incorporated in 2011 and is headquartered in Corte Madera, California.