Critical Analysis: Grove Collaborative (NYSE:GROV) versus Walmart (NASDAQ:WMT)

Grove Collaborative (NYSE:GROV) and Walmart (NASDAQ:WMT) are both consumer staples companies, but which is the superior business? We will contrast the two businesses based on the strength of their institutional ownership, analyst recommendations, earnings, valuation, profitability, risk and dividends.

Insider and Institutional Ownership

91.6% of Grove Collaborative shares are held by institutional investors. Comparatively, 26.8% of Walmart shares are held by institutional investors. 30.3% of Grove Collaborative shares are held by company insiders. Comparatively, 0.1% of Walmart shares are held by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock is poised for long-term growth.

Volatility and Risk

Grove Collaborative has a beta of 1.03, indicating that its share price is 3% more volatile than the S&P 500. Comparatively, Walmart has a beta of 0.59, indicating that its share price is 41% less volatile than the S&P 500.

Analyst Ratings

This is a breakdown of current ratings and price targets for Grove Collaborative and Walmart, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Grove Collaborative	1	0	1	0	2.00
Walmart	0	4	32	3	2.97

Grove Collaborative currently has a consensus price target of $2.00, suggesting a potential upside of 95.12%. Walmart has a consensus price target of $131.88, suggesting a potential upside of 20.90%. Given Grove Collaborative’s higher possible upside, equities research analysts plainly believe Grove Collaborative is more favorable than Walmart.

Profitability

This table compares Grove Collaborative and Walmart’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Grove Collaborative	-4.07%	N/A	-12.35%
Walmart	3.00%	21.83%	7.80%

Earnings and Valuation

This table compares Grove Collaborative and Walmart”s gross revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Grove Collaborative	$158.94 million	0.28	-$11.72 million	($0.19)	-5.39
Walmart	$735.84 billion	1.18	$21.89 billion	$2.77	39.38

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

Summary

Walmart beats Grove Collaborative on 11 of the 15 factors compared between the two stocks.

About Grove Collaborative

Grove Collaborative Holdings, Inc. operates as a plastic neutral consumer products retailer in the United States. It offers household, personal care, beauty, and other consumer products through retail channels, third parties, direct-to-consumer platform, and mobile applications, as well as online store. The company is headquartered in San Francisco, California.

About Walmart

Walmart Inc. engages in the operation of retail, wholesale, other units, and eCommerce worldwide. The company operates through three segments: Walmart U.S., Walmart International, and Sam's Club. It operates supercenters, supermarkets, hypermarkets, warehouse clubs, cash and carry stores, and discount stores under Walmart and Walmart Neighborhood Market brands; membership-only warehouse clubs; ecommerce websites, such as walmart.com.mx, walmart.ca, flipkart.com, PhonePe and other sites; and mobile commerce applications. The company offers grocery and consumables, including dairy, meat, bakery, deli, produce, dry, chilled or frozen packaged foods, alcoholic and nonalcoholic beverages, floral, snack foods, candy, other grocery items, health and beauty aids, paper goods, laundry and home care, baby care, pet supplies, and other consumable items; fuel, tobacco and other categories. It is also involved in the provision of health and wellness products covering pharmacy, optical and hearing services, and over-the-counter drugs and other medical products; and home and apparel including home improvement, outdoor living, gardening, furniture, apparel, jewelry, tools and power equipment, housewares, toys, seasonal items, mattresses and tire and battery centers. In addition, the company offers consumer electronics and accessories, software, video games, office supplies, appliances, and third-party gift cards. Further, it operates digital payment platforms; and offers financial services and related products, including money transfers, bill payments, money orders, check cashing, prepaid access, co-branded credit cards, installment lending, and earned wage access. Additionally, the company markets lines of merchandise under private brands, including Allswell, Athletic Works, Equate, and Free Assembly. The company was formerly known as Wal-Mart Stores, Inc. and changed its name to Walmart Inc. in February 2018. Walmart Inc. was founded in 1945 and is based in Bentonville, Arkansas.