RealReal (NASDAQ:REAL) and Alibaba Group (NYSE:BABA) Head-To-Head Analysis

RealReal (NASDAQ:REAL) and Alibaba Group (NYSE:BABA) are both consumer discretionary companies, but which is the better investment? We will contrast the two companies based on the strength of their risk, earnings, analyst recommendations, institutional ownership, valuation, dividends and profitability.

Profitability

This table compares RealReal and Alibaba Group’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
RealReal	-10.82%	N/A	-17.99%
Alibaba Group	7.00%	4.79%	2.80%

Valuation & Earnings

This table compares RealReal and Alibaba Group”s gross revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
RealReal	$692.84 million	2.23	-$41.80 million	($0.67)	-18.93
Alibaba Group	$148.40 billion	1.68	$15.02 billion	$4.13	24.27

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

Analyst Recommendations

This is a summary of current ratings and recommmendations for RealReal and Alibaba Group, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
RealReal	1	2	6	0	2.56
Alibaba Group	0	6	13	2	2.81

RealReal presently has a consensus target price of $17.50, suggesting a potential upside of 37.96%. Alibaba Group has a consensus target price of $182.89, suggesting a potential upside of 82.44%. Given Alibaba Group’s stronger consensus rating and higher probable upside, analysts clearly believe Alibaba Group is more favorable than RealReal.

Institutional & Insider Ownership

64.7% of RealReal shares are held by institutional investors. Comparatively, 13.5% of Alibaba Group shares are held by institutional investors. 2.7% of RealReal shares are held by company insiders. Comparatively, 12.5% of Alibaba Group shares are held by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company will outperform the market over the long term.

Volatility & Risk

RealReal has a beta of 2.81, suggesting that its stock price is 181% more volatile than the S&P 500. Comparatively, Alibaba Group has a beta of 0.47, suggesting that its stock price is 53% less volatile than the S&P 500.

Summary

Alibaba Group beats RealReal on 12 of the 15 factors compared between the two stocks.

About RealReal

The RealReal, Inc. operates an online marketplace for resale luxury goods in the United State. The company offers various product categories, including women's fashion, men's fashion, jewelry, and watches. It primarily sells products through online marketplace and retail stores. The company was incorporated in 2011 and is headquartered in San Francisco, California.

About Alibaba Group

Alibaba Group Holding Limited, through its subsidiaries, provides technology infrastructure and marketing reach to help merchants, brands, retailers, and other businesses to engage with their users and customers in the People's Republic of China and internationally. The company operates through seven segments: China Commerce, International Commerce, Local Consumer Services, Cainiao, Cloud, Digital Media and Entertainment, and Innovation Initiatives and Others. It operates Taobao, a digital retail platform; Tmall, a third-party online and mobile commerce platform; Alimama, a monetization platform; 1688.com and Alibaba.com, which are online wholesale marketplaces; AliExpress, a retail marketplace; Lazada, Trendyol, and Daraz that are e-commerce platforms; Freshippo, a retail platform for groceries and fresh goods; and Tmall Global, an import e-commerce platform. The company also operates Cainiao Network logistic services platform; Ele.me, an on-demand delivery and local services platform; Koubei, a restaurant and local services guide platform; and Fliggy, an online travel platform. In addition, it offers pay-for-performance, in-feed, and display marketing services; and Taobao Ad Network and Exchange, a real-time online bidding marketing exchange. Further, the company provides elastic computing, storage, network, security, database, big data, and IoT services; and hardware, software license, software installation, and application development and maintenance services. Additionally, it operates Youku, an online video platform; Quark, a platform for information search, storage, and consumption; Alibaba Pictures and other content platforms that provide online videos, films, live events, news feeds, literature, music, and others; Amap, a mobile digital map, navigation, and real-time traffic information app; DingTalk, a business efficiency mobile app; and Tmall Genie smart speaker. The company was incorporated in 1999 and is based in Hangzhou, the People's Republic of China.