Wayfair (NYSE:W) and RH (NYSE:RH) are both large-cap retail/wholesale companies, but which is the superior investment? We will contrast the two businesses based on the strength of their institutional ownership, dividends, analyst recommendations, risk, profitability, valuation and earnings.
Profitability
This table compares Wayfair and RH's net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets |
---|
Wayfair | -5.35% | N/A | -18.55% |
RH | 7.78% | 354.62% | 16.32% |
Analyst Ratings
This is a summary of recent recommendations and price targets for Wayfair and RH, as reported by MarketBeat.com.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score |
---|
Wayfair | 5 | 11 | 15 | 0 | 2.32 |
RH | 1 | 5 | 11 | 0 | 2.59 |
Wayfair presently has a consensus target price of $273.00, suggesting a potential downside of 8.98%. RH has a consensus target price of $450.6429, suggesting a potential downside of 10.23%. Given Wayfair's higher probable upside, equities analysts clearly believe Wayfair is more favorable than RH.
Insider and Institutional Ownership
81.3% of Wayfair shares are held by institutional investors. 30.9% of Wayfair shares are held by company insiders. Comparatively, 33.0% of RH shares are held 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.
Risk & Volatility
Wayfair has a beta of 3.43, meaning that its stock price is 243% more volatile than the S&P 500. Comparatively, RH has a beta of 2.58, meaning that its stock price is 158% more volatile than the S&P 500.
Valuation and Earnings
This table compares Wayfair and RH's top-line revenue, earnings per share and valuation.
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio |
---|
Wayfair | $9.13 billion | 3.27 | $-984,580,000.00 | ($10.65) | -28.16 |
RH | $2.65 billion | 3.87 | $220.38 million | $11.66 | 43.05 |
RH has lower revenue, but higher earnings than Wayfair. Wayfair is trading at a lower price-to-earnings ratio than RH, indicating that it is currently the more affordable of the two stocks.
Summary
RH beats Wayfair on 9 of the 14 factors compared between the two stocks.