Reviewing Winmark (NASDAQ:WINA) & Rent the Runway (NASDAQ:RENT)

Rent the Runway (NASDAQ:RENT) and Winmark (NASDAQ:WINA) are both small-cap consumer discretionary companies, but which is the better investment? We will contrast the two companies based on the strength of their risk, dividends, profitability, valuation, institutional ownership, analyst recommendations and earnings.

Insider & Institutional Ownership

73.1% of Rent the Runway shares are owned by institutional investors. Comparatively, 73.3% of Winmark shares are owned by institutional investors. 0.4% of Rent the Runway shares are owned by insiders. Comparatively, 10.4% of Winmark shares are owned by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock is poised for long-term growth.

Analyst Recommendations

This is a breakdown of current ratings for Rent the Runway and Winmark, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Rent the Runway	1	0	0	0	1.00
Winmark	0	1	0	0	2.00

Earnings & Valuation

This table compares Rent the Runway and Winmark”s gross revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Rent the Runway	$329.80 million	0.25	$22.60 million	$6.49	0.38
Winmark	$86.06 million	12.87	$41.65 million	$11.02	27.99

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

Profitability

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

	Net Margins	Return on Equity	Return on Assets
Rent the Runway	8.51%	N/A	-30.10%
Winmark	47.09%	-99.47%	103.54%

Volatility and Risk

Rent the Runway has a beta of 1.18, meaning that its stock price is 18% more volatile than the S&P 500. Comparatively, Winmark has a beta of 0.54, meaning that its stock price is 46% less volatile than the S&P 500.

Summary

Winmark beats Rent the Runway on 9 of the 12 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 Winmark

Winmark Corporation, a resale company operates as a franchisor for small business in the United States and Canada. The company franchises retail stores concepts that buy, sell and trade merchandise. It also operates middle-market equipment leasing business. In addition, the company buys and sells used clothing and accessories geared toward the teenage and young adult market under Plato’s Closet brand; and operates stores which buys and sells used and new children’s clothing, toys, furniture, equipment, and accessories primarily to parents of children ages infant to 12 years under the Once Upon A Child brand. Further, it buys, sells, trades in, and used and new sporting goods, equipment, and accessories for various athletic activities including team sports, such as baseball/softball, hockey, football, lacrosse, and soccer, as well as fitness, ski/snowboard, golf, and others under the Play It Again Sports brand; and buys and sells used women’s apparel, shoes, and accessories under the Style Encore brand. Additionally, the company buys, sells, trades in, and used and new musical instruments, speakers, amplifiers, music-related electronics, and related accessories under the Music Go Round brand. Winmark Corporation was incorporated in 1988 and is headquartered in Minneapolis, Minnesota.