Head to Head Survey: Ross Stores (NASDAQ:ROST) and Zalando (OTCMKTS:ZLNDY)

Zalando (OTCMKTS:ZLNDY) and Ross Stores (NASDAQ:ROST) are both consumer discretionary companies, but which is the better stock? We will compare the two businesses based on the strength of their profitability, analyst recommendations, dividends, valuation, risk, institutional ownership and earnings.

Risk & Volatility

Zalando has a beta of 1.46, indicating that its stock price is 46% more volatile than the S&P 500. Comparatively, Ross Stores has a beta of 0.83, indicating that its stock price is 17% less volatile than the S&P 500.

Analyst Recommendations

This is a summary of current recommendations and price targets for Zalando and Ross Stores, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Zalando	0	1	1	2	3.25
Ross Stores	0	5	15	1	2.81

Ross Stores has a consensus price target of $263.76, indicating a potential upside of 17.12%. Given Ross Stores’ higher probable upside, analysts plainly believe Ross Stores is more favorable than Zalando.

Profitability

This table compares Zalando and Ross Stores’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Zalando	0.70%	3.46%	1.06%
Ross Stores	10.85%	39.29%	15.79%

Insider and Institutional Ownership

86.9% of Ross Stores shares are owned by institutional investors. 2.1% of Ross Stores 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.

Valuation & Earnings

This table compares Zalando and Ross Stores”s gross revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Zalando	$13.97 billion	0.45	$243.36 million	$0.22	58.41
Ross Stores	$22.75 billion	3.16	$2.15 billion	$8.26	27.26

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

Summary

Ross Stores beats Zalando on 11 of the 15 factors compared between the two stocks.

About Zalando

Zalando SE operates an online platform for fashion and lifestyle products. The company operates through Fashion Store and Offprice segments. It provides shoes, apparel, accessories, and beauty products with free delivery and returns, as well as various payment options. The company also sells its products through Lounge by Zalando; and brick-and-mortar outlet stores. It operates in Germany, Austria, Switzerland, Belgium, Croatia, the Czech Republic, Denmark, Estonia, Finland, Hungary, France, Ireland, Italy, Latvia, Lithuania, Luxembourg, the Netherlands, Norway, Poland, Romania, Slovakia, Slovenia, Spain, Sweden, and the United Kingdom. The company was founded in 2008 and is headquartered in Berlin, Germany.

About Ross Stores

Ross Stores, Inc., together with its subsidiaries, operates off-price retail apparel and home fashion stores under the Ross Dress for Less and dd’s DISCOUNTS brand names in the United States. Its stores primarily offer apparel, accessories, footwear, and home fashions. The company’s Ross Dress for Less stores sell its products at department and specialty stores to middle income households; and dd’s DISCOUNTS stores sell its products at department and discount stores for households with moderate income. Ross Stores, Inc. was incorporated in 1957 and is headquartered in Dublin, California.