Lulu’s Fashion Lounge (NASDAQ:LVLU) vs. Rent the Runway (NASDAQ:RENT) Head-To-Head Analysis

Lulu’s Fashion Lounge (NASDAQ:LVLU) and Rent the Runway (NASDAQ:RENT) are both small-cap retail/wholesale companies, but which is the better stock? We will compare the two businesses based on the strength of their profitability, dividends, risk, institutional ownership, valuation, earnings and analyst recommendations.

Institutional & Insider Ownership

73.8% of Lulu’s Fashion Lounge shares are held by institutional investors. Comparatively, 73.1% of Rent the Runway shares are held by institutional investors. 6.8% of Lulu’s Fashion Lounge shares are held by insiders. Comparatively, 8.2% of Rent the Runway shares are held by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company is poised for long-term growth.

Analyst Ratings

This is a breakdown of current recommendations for Lulu’s Fashion Lounge and Rent the Runway, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Lulu’s Fashion Lounge	1	0	0	0	1.00
Rent the Runway	1	0	0	0	1.00

Valuation and Earnings

This table compares Lulu’s Fashion Lounge and Rent the Runway”s gross revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Lulu’s Fashion Lounge	$275.66 million	0.10	-$13.71 million	($3.50)	-2.77
Rent the Runway	$329.80 million	0.37	$22.60 million	$0.48	7.63

Rent the Runway has higher revenue and earnings than Lulu’s Fashion Lounge. Lulu’s Fashion Lounge is trading at a lower price-to-earnings ratio than Rent the Runway, indicating that it is currently the more affordable of the two stocks.

Profitability

This table compares Lulu’s Fashion Lounge and Rent the Runway’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Lulu’s Fashion Lounge	-3.56%	-423.50%	-9.95%
Rent the Runway	6.85%	N/A	-32.17%

Volatility and Risk

Lulu’s Fashion Lounge has a beta of 0.42, meaning that its stock price is 58% less volatile than the S&P 500. Comparatively, Rent the Runway has a beta of 1.23, meaning that its stock price is 23% more volatile than the S&P 500.

Summary

Rent the Runway beats Lulu’s Fashion Lounge on 9 of the 11 factors compared between the two stocks.

About Lulu’s Fashion Lounge

Lulu’s Fashion Lounge Holdings, Inc. engages in providing an online website for clothing. It offers retailing of women’s clothing, shoes, and accessories. The company was founded in 1996 and is headquartered in Chico, CA.

About Rent the Runway

Rent the Runway, Inc. operates shared designer closet in the United States. The company offers evening wear and accessories, ready-to-wear, workwear, denim, casual, maternity, outerwear, blouses, knitwear, loungewear, jewelry, handbags, activewear, and ski wear under subscription, rental, and resale offering. It also engages in the software development and support activities. Rent the Runway, Inc. was incorporated in 2009 and is headquartered in Brooklyn, New York.