Head to Head Review: RealReal (NASDAQ:REAL) vs. Macy’s (NYSE:M)

Macy’s (NYSE:M) and RealReal (NASDAQ:REAL) are both consumer discretionary companies, but which is the superior investment? We will contrast the two companies based on the strength of their risk, valuation, profitability, analyst recommendations, dividends, earnings and institutional ownership.

Analyst Recommendations

This is a summary of current ratings and price targets for Macy’s and RealReal, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Macy’s	2	7	3	1	2.23
RealReal	1	2	6	0	2.56

Macy’s presently has a consensus price target of $22.78, indicating a potential upside of 1.23%. RealReal has a consensus price target of $17.75, indicating a potential upside of 81.49%. Given RealReal’s stronger consensus rating and higher probable upside, analysts clearly believe RealReal is more favorable than Macy’s.

Insider and Institutional Ownership

87.4% of Macy’s shares are owned by institutional investors. Comparatively, 64.7% of RealReal shares are owned by institutional investors. 1.1% of Macy’s shares are owned by insiders. Comparatively, 2.7% of RealReal shares are owned 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.

Profitability

This table compares Macy’s and RealReal’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Macy’s	2.94%	13.68%	3.88%
RealReal	-10.82%	N/A	-17.99%

Volatility & Risk

Macy’s has a beta of 1.41, meaning that its stock price is 41% more volatile than the S&P 500. Comparatively, RealReal has a beta of 2.71, meaning that its stock price is 171% more volatile than the S&P 500.

Earnings & Valuation

This table compares Macy’s and RealReal”s top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Macy’s	$22.62 billion	0.26	$642.00 million	$2.42	9.30
RealReal	$692.84 million	1.72	-$41.80 million	($1.12)	-8.73

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

Summary

Macy’s beats RealReal on 9 of the 15 factors compared between the two stocks.

About Macy’s

Macy’s, Inc. engages in the retail of apparel, accessories, cosmetics, home furnishings, and other consumer goods. The firm’s brands include Macy’s, Bloomingdale’s, and Bluemercury. It offers men’s, women’s, and children’s apparel, women’s accessories, intimate apparel, shoes, cosmetics, fragrances, as well as home and miscellaneous products. The company was founded by Rowland H. Macy in 1858 and is headquartered in New York, NY.

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.