Analyzing Chewy (NYSE:CHWY) & Leslie’s (NASDAQ:LESL)

Chewy (NYSE:CHWY) and Leslie’s (NASDAQ:LESL) are both consumer discretionary companies, but which is the superior stock? We will compare the two businesses based on the strength of their institutional ownership, profitability, analyst recommendations, dividends, earnings, risk and valuation.

Profitability

This table compares Chewy and Leslie’s’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Chewy	1.99%	60.02%	8.17%
Leslie’s	-21.24%	N/A	-8.96%

Analyst Recommendations

This is a summary of recent ratings and recommmendations for Chewy and Leslie’s, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Chewy	1	6	18	1	2.73
Leslie’s	2	4	1	0	1.86

Chewy presently has a consensus price target of $31.50, indicating a potential upside of 35.66%. Leslie’s has a consensus price target of $2.85, indicating a potential upside of 383.05%. Given Leslie’s’ higher probable upside, analysts clearly believe Leslie’s is more favorable than Chewy.

Insider and Institutional Ownership

93.1% of Chewy shares are held by institutional investors. 0.3% of Chewy shares are held by company insiders. Comparatively, 0.5% of Leslie’s shares are held by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a company will outperform the market over the long term.

Earnings & Valuation

This table compares Chewy and Leslie’s”s top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Chewy	$12.60 billion	0.75	$222.80 million	$0.60	38.70
Leslie’s	$1.24 billion	0.00	-$236.97 million	($27.08)	-0.02

Chewy has higher revenue and earnings than Leslie’s. Leslie’s is trading at a lower price-to-earnings ratio than Chewy, indicating that it is currently the more affordable of the two stocks.

Volatility & Risk

Chewy has a beta of 1.42, suggesting that its stock price is 42% more volatile than the S&P 500. Comparatively, Leslie’s has a beta of 1.74, suggesting that its stock price is 74% more volatile than the S&P 500.

Summary

Chewy beats Leslie’s on 12 of the 15 factors compared between the two stocks.

About Chewy

Chewy, Inc., together with its subsidiaries, engages in the pure play e-commerce business in the United States. It provides pet food and treats, pet supplies and pet medications, and other pet-health products, as well as pet services for dogs, cats, fish, birds, small pets, horses, and reptiles through its retail websites and mobile applications. The company was founded in 2010 and is based in Plantation, Florida.

About Leslie’s

Leslie’s, Inc. operates as a direct-to-consumer pool and spa care brand in the United States. The company markets and sells pool and spa supplies and related products and services. It also offers various pool and spa maintenance items, such as chemicals, equipment and parts, cleaning and maintenance equipment, safety, recreational, and fitness related products. In addition, the company provides installation and repair services for pool and spa equipment. It also sells its products through e-commerce websites and third-party marketplaces. The company offers complimentary, commercial-grade in-store, water testing, and analysis services. It serves the residential, professional, and commercial consumers. Leslie’s, Inc. was founded in 1963 and is based in Phoenix, Arizona.