Analyzing ThredUp (NASDAQ:TDUP) and Arhaus (NASDAQ:ARHS)

ThredUp (NASDAQ:TDUP) and Arhaus (NASDAQ:ARHS) are both small-cap consumer discretionary companies, but which is the better investment? We will compare the two businesses based on the strength of their dividends, risk, valuation, analyst recommendations, earnings, institutional ownership and profitability.

Profitability

This table compares ThredUp and Arhaus’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
ThredUp	-6.65%	-37.30%	-13.03%
Arhaus	4.91%	17.23%	4.94%

Risk and Volatility

ThredUp has a beta of 2.11, suggesting that its stock price is 111% more volatile than the S&P 500. Comparatively, Arhaus has a beta of 2.29, suggesting that its stock price is 129% more volatile than the S&P 500.

Insider and Institutional Ownership

89.1% of ThredUp shares are held by institutional investors. Comparatively, 27.9% of Arhaus shares are held by institutional investors. 23.1% of ThredUp shares are held by insiders. Comparatively, 1.2% of Arhaus shares are held by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company will outperform the market over the long term.

Earnings & Valuation

This table compares ThredUp and Arhaus”s revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
ThredUp	$310.81 million	0.93	-$20.21 million	($0.17)	-12.94
Arhaus	$1.38 billion	1.02	$67.26 million	$0.50	19.86

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

Analyst Ratings

This is a summary of current ratings and recommmendations for ThredUp and Arhaus, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
ThredUp	1	0	4	0	2.60
Arhaus	0	4	5	1	2.70

ThredUp presently has a consensus price target of $6.55, suggesting a potential upside of 197.73%. Arhaus has a consensus price target of $10.22, suggesting a potential upside of 2.94%. Given ThredUp’s higher possible upside, equities research analysts plainly believe ThredUp is more favorable than Arhaus.

Summary

Arhaus beats ThredUp on 12 of the 15 factors compared between the two stocks.

About ThredUp

ThredUp Inc., together with its subsidiaries, operates an online resale platform in the United States and internationally. Its platform enables consumers to buy and sell primarily secondhand apparel, shoes, and accessories. ThredUp Inc. was incorporated in 2009 and is headquartered in Oakland, California.

About Arhaus

Arhaus, Inc. operates as a lifestyle brand and premium retailer in the home furnishings market in the United States. It provides merchandise assortments across various categories, including furniture, lighting, textiles, décor, and outdoor. The company's furniture products comprise bedroom, dining room, living room, and home office furnishings, which includes sofas, dining tables and chairs, accent chairs, console and coffee tables, beds, headboards, dressers, desks, bookcases, modular storage, and other items; and outdoor products, such as outdoor dining tables, chairs, chaises and other furniture, lighting, textiles, décor, umbrellas, and fire pits. It offers lighting products, including various distinct and artistic lighting fixtures comprising chandeliers, pendants, table and floor lamps, and sconces; textile products, such as handcrafted indoor and outdoor rugs, bed linens, and pillows and throws; and décor products, including various wall art to mirrors, vases to candles, and other decorative accessories. The company distributes its products through an omni-channel model comprising showrooms, e-commerce platform, print and digital media, and in-home designer services. Arhaus, Inc. was founded in 1986 and is headquartered in Boston Heights, Ohio.