Advance Auto Parts (NYSE:AAP) versus Rent the Runway (NASDAQ:RENT) Financial Survey

Advance Auto Parts (NYSE:AAP) and Rent the Runway (NASDAQ:RENT) are both consumer discretionary companies, but which is the superior investment? We will contrast the two businesses based on the strength of their institutional ownership, dividends, analyst recommendations, earnings, risk, profitability and valuation.

Profitability

This table compares Advance Auto Parts and Rent the Runway’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Advance Auto Parts	0.97%	9.84%	1.83%
Rent the Runway	11.80%	N/A	-21.89%

Analyst Ratings

This is a breakdown of recent recommendations and price targets for Advance Auto Parts and Rent the Runway, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Advance Auto Parts	4	16	2	0	1.91
Rent the Runway	1	0	0	0	1.00

Advance Auto Parts presently has a consensus target price of $47.61, indicating a potential upside of 3.96%. Given Advance Auto Parts’ stronger consensus rating and higher possible upside, equities analysts plainly believe Advance Auto Parts is more favorable than Rent the Runway.

Risk and Volatility

Advance Auto Parts has a beta of 1.07, meaning that its stock price is 7% more volatile than the S&P 500. Comparatively, Rent the Runway has a beta of 1.24, meaning that its stock price is 24% more volatile than the S&P 500.

Institutional and Insider Ownership

88.7% of Advance Auto Parts shares are owned by institutional investors. Comparatively, 73.1% of Rent the Runway shares are owned by institutional investors. 0.8% of Advance Auto Parts shares are owned by company insiders. Comparatively, 0.4% of Rent the Runway shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company will outperform the market over the long term.

Valuation & Earnings

This table compares Advance Auto Parts and Rent the Runway”s revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Advance Auto Parts	$8.60 billion	0.32	$44.00 million	$1.37	33.43
Rent the Runway	$329.80 million	0.27	$22.60 million	$12.66	0.21

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

Summary

Advance Auto Parts beats Rent the Runway on 11 of the 14 factors compared between the two stocks.

About Advance Auto Parts

Advance Auto Parts, Inc. provides automotive replacement parts, accessories, batteries, and maintenance items for domestic and imported cars, vans, sport utility vehicles, and light and heavy duty trucks. The company offers battery accessories; belts and hoses; brakes and brake pads; chassis and climate control parts; clutches and drive shafts; engines and engine parts; exhaust systems and parts; hub assemblies; ignition components and wires; radiators and cooling parts; starters and alternators; and steering and alignment parts. It also offers air conditioning chemicals and accessories; air fresheners; antifreeze and washer fluids; electrical wires and fuses; electronics; floor mats, seat covers, and interior accessories; hand and specialty tools; lighting products; performance parts; sealants, adhesives, and compounds; tire repair accessories; vent shades, mirrors and exterior accessories; washes, waxes and cleaning supplies; and wiper blades. In addition, the company offers air filters; fuel and oil additives; fuel filters; grease and lubricants; motor oils; oil filters, part cleaners and treatments; and transmission fluids for engine maintenance. Further, it offers battery and wiper installation; engine light scanning and checking; electrical system testing, including batteries, starters, and alternators; oil and battery recycling; and loaner tool program services. Additionally, the company sells its products through its website. It serves professional installers and do-it-yourself customers. The company operates stores under the Advance Auto Parts and Carquest names, as well as branches under the Worldpac name. The company has stores in the United States, Puerto Rico, the U.S. Virgin Islands, and Canada; and independently owned Carquest branded stores in Mexico and various Caribbean Islands. Advance Auto Parts, Inc. was founded in 1929 and is based in Raleigh, North Carolina.

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.