Analyzing AutoZone (NYSE:AZO) and Revolve Group (NYSE:RVLV)

AutoZone (NYSE:AZO) and Revolve Group (NYSE:RVLV) are both consumer discretionary companies, but which is the superior investment? We will contrast the two companies based on the strength of their profitability, analyst recommendations, dividends, risk, valuation, earnings and institutional ownership.

Profitability

This table compares AutoZone and Revolve Group’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
AutoZone	12.40%	-80.35%	12.33%
Revolve Group	5.54%	13.38%	8.71%

Insider and Institutional Ownership

92.7% of AutoZone shares are owned by institutional investors. Comparatively, 67.6% of Revolve Group shares are owned by institutional investors. 2.6% of AutoZone shares are owned by company insiders. Comparatively, 42.7% of Revolve Group shares are owned by company insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company is poised for long-term growth.

Volatility and Risk

AutoZone has a beta of 0.34, suggesting that its share price is 66% less volatile than the S&P 500. Comparatively, Revolve Group has a beta of 1.61, suggesting that its share price is 61% more volatile than the S&P 500.

Analyst Recommendations

This is a summary of current recommendations and price targets for AutoZone and Revolve Group, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
AutoZone	0	6	20	1	2.81
Revolve Group	0	6	7	0	2.54

AutoZone currently has a consensus price target of $3,913.62, indicating a potential upside of 36.86%. Revolve Group has a consensus price target of $30.08, indicating a potential upside of 45.88%. Given Revolve Group’s higher probable upside, analysts clearly believe Revolve Group is more favorable than AutoZone.

Valuation & Earnings

This table compares AutoZone and Revolve Group”s gross revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
AutoZone	$18.94 billion	2.47	$2.50 billion	$145.45	19.66
Revolve Group	$1.23 billion	1.20	$61.71 million	$1.01	20.41

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

Summary

AutoZone beats Revolve Group on 10 of the 15 factors compared between the two stocks.

About AutoZone

AutoZone, Inc. retails and distributes automotive replacement parts and accessories in the United States, Mexico, and Brazil. The company provides various products for cars, sport utility vehicles, vans, and light trucks, including new and remanufactured automotive hard parts, maintenance items, accessories, and non-automotive products. It also offers A/C compressors, batteries and accessories, bearings, belts and hoses, calipers, chassis, clutches, CV axles, engines, fuel pumps, fuses, ignition and lighting products, mufflers, radiators, starters and alternators, thermostats, and water pumps, as well as tire repairs. In addition, the company provides maintenance products, such as antifreeze and windshield washer fluids; brake drums, rotors, shoes, and pads; brake and power steering fluids, and oil and fuel additives; oil and transmission fluids; oil, cabin, air, fuel, and transmission filters; oxygen sensors; paints and accessories; refrigerants and accessories; shock absorbers and struts; spark plugs and wires; and windshield wipers. Further, it offers air fresheners, cell phone accessories, drinks and snacks, floor mats and seat covers, interior and exterior accessories, mirrors, performance products, protectants and cleaners, sealants and adhesives, steering wheel covers, tools, vehicle entertainment systems, and wash and wax products, as well as towing services. Additionally, the company provides a sales program that offers commercial credit and delivery of parts and other products; sells automotive diagnostic and repair software under the ALLDATA brand through alldata.com and alldatadiy.com; and automotive hard parts, maintenance items, accessories, and non-automotive products through autozone.com. AutoZone, Inc. was founded in 1979 and is headquartered in Memphis, Tennessee.

About Revolve Group

Revolve Group, Inc. operates as an online fashion retailer for millennial and generation z consumers in the United States and internationally. The company operates in two segments, REVOLVE and FWRD. It operates a platform that connects consumers and global fashion influencers, as well as emerging, established, and owned brands. The company offers apparel, footwear, accessories, beauty, and home products from emerging, established, and owned brands, as well as luxury brands through its websites and mobile apps. The company was formerly known as Advance Holdings, LLC and changed its name to Revolve Group, Inc. in October 2018. Revolve Group, Inc. was founded in 2003 and is headquartered in Cerritos, California.