Rent the Runway (NASDAQ:RENT) and Children’s Place (NASDAQ:PLCE) Head-To-Head Analysis

Children’s Place (NASDAQ:PLCE) and Rent the Runway (NASDAQ:RENT) are both small-cap retail/wholesale companies, but which is the superior business? We will compare the two companies based on the strength of their earnings, dividends, risk, institutional ownership, valuation, profitability and analyst recommendations.

Valuation & Earnings

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

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Children’s Place	$1.18 billion	0.05	-$88.26 million	($4.84)	-0.50
Rent the Runway	$329.80 million	0.31	$22.60 million	$6.49	0.46

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

Volatility and Risk

Children’s Place has a beta of 1.94, indicating that its stock price is 94% more volatile than the S&P 500. Comparatively, Rent the Runway has a beta of 1.19, indicating that its stock price is 19% more volatile than the S&P 500.

Analyst Recommendations

This is a summary of recent ratings and price targets for Children’s Place and Rent the Runway, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Children’s Place	1	1	0	0	1.50
Rent the Runway	1	0	0	0	1.00

Children’s Place presently has a consensus price target of $4.00, suggesting a potential upside of 65.98%. Given Children’s Place’s stronger consensus rating and higher probable upside, equities analysts plainly believe Children’s Place is more favorable than Rent the Runway.

Insider & Institutional Ownership

73.1% of Rent the Runway shares are owned by institutional investors. 0.9% of Children’s Place 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 hedge funds, large money managers and endowments believe a company will outperform the market over the long term.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
Children’s Place	-9.09%	N/A	-12.53%
Rent the Runway	8.51%	N/A	-30.10%

About Children’s Place

The Children’s Place, Inc. engages in the provision of apparel, footwear, accessories, and other items for children. The firm also designs contracts to manufacture and sell fashionable and value-priced merchandise under the brand names of The Children’s Place, Baby Place, and Gymboree. It operates through The Children’s Place U.S. and The Children’s Place International segments. The Children’s Place U.S. segment refers to the company’s U.S. and Puerto Rico-based stores and revenue from its U.S. based wholesale business. The Children’s Place International segment is involved in the Canadian-based stores, revenue from the company’s Canadian-based wholesale business, as well as revenue from international franchisees. The company was founded by David Pulver and Clinton A. Clark in 1969 and is headquartered in Secaucus, NJ.

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.