Bath & Body Works (NYSE:BBWI) and Rent the Runway (NASDAQ:RENT) Critical Analysis

Rent the Runway (NASDAQ:RENT) and Bath & Body Works (NYSE:BBWI) are both retail/wholesale companies, but which is the superior stock? We will compare the two companies based on the strength of their analyst recommendations, earnings, profitability, valuation, risk, institutional ownership and dividends.

Valuation and Earnings

This table compares Rent the Runway and Bath & Body Works”s top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Rent the Runway	$306.20 million	0.06	-$113.20 million	($18.58)	-0.23
Bath & Body Works	$7.31 billion	0.90	$878.00 million	$3.64	8.47

Bath & Body Works has higher revenue and earnings than Rent the Runway. Rent the Runway is trading at a lower price-to-earnings ratio than Bath & Body Works, indicating that it is currently the more affordable of the two stocks.

Insider and Institutional Ownership

73.1% of Rent the Runway shares are held by institutional investors. Comparatively, 95.1% of Bath & Body Works shares are held by institutional investors. 6.6% of Rent the Runway shares are held by insiders. Comparatively, 0.3% of Bath & Body Works shares are held by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock is poised for long-term growth.

Profitability

This table compares Rent the Runway and Bath & Body Works’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Rent the Runway	-26.60%	N/A	-28.93%
Bath & Body Works	12.43%	-44.03%	14.45%

Volatility & Risk

Rent the Runway has a beta of 1.33, meaning that its share price is 33% more volatile than the S&P 500. Comparatively, Bath & Body Works has a beta of 1.69, meaning that its share price is 69% more volatile than the S&P 500.

Analyst Ratings

This is a summary of current ratings and target prices for Rent the Runway and Bath & Body Works, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Rent the Runway	0	2	2	0	2.50
Bath & Body Works	0	4	14	0	2.78

Rent the Runway presently has a consensus price target of $33.00, indicating a potential upside of 660.37%. Bath & Body Works has a consensus price target of $42.69, indicating a potential upside of 38.46%. Given Rent the Runway’s higher probable upside, equities analysts clearly believe Rent the Runway is more favorable than Bath & Body Works.

Summary

Bath & Body Works beats Rent the Runway on 11 of the 14 factors compared between the two stocks.

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.

About Bath & Body Works

Bath & Body Works, Inc. is a specialty retailers and home to America’s Favorite Fragrances, offering a breadth of exclusive fragrances for the body and home, including the selling collections for fine fragrance mist, body lotion and body cream, 3-wick candles, home fragrance diffusers and liquid hand soap. The company was founded by Leslie Herbert Wexner in 1963 and is headquartered in Columbus, OH.