Critical Contrast: Kohl’s (NYSE:KSS) vs. RealReal (NASDAQ:REAL)

RealReal (NASDAQ:REAL) and Kohl’s (NYSE:KSS) are both consumer discretionary companies, but which is the better business? We will compare the two companies based on the strength of their risk, institutional ownership, profitability, earnings, valuation, dividends and analyst recommendations.

Profitability

This table compares RealReal and Kohl’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%
Kohl’s	1.75%	6.75%	2.02%

Volatility & Risk

RealReal has a beta of 2.71, indicating that its share price is 171% more volatile than the S&P 500. Comparatively, Kohl’s has a beta of 1.37, indicating that its share price is 37% more volatile than the S&P 500.

Analyst Recommendations

This is a summary of current recommendations for RealReal and Kohl’s, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
RealReal	1	2	6	0	2.56
Kohl’s	5	8	1	1	1.87

RealReal presently has a consensus price target of $17.75, indicating a potential upside of 81.49%. Kohl’s has a consensus price target of $16.17, indicating a potential downside of 13.11%. Given RealReal’s stronger consensus rating and higher possible upside, research analysts plainly believe RealReal is more favorable than Kohl’s.

Insider and Institutional Ownership

64.7% of RealReal shares are owned by institutional investors. Comparatively, 98.0% of Kohl’s shares are owned by institutional investors. 2.7% of RealReal shares are owned by company insiders. Comparatively, 1.5% of Kohl’s shares are owned by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company will outperform the market over the long term.

Earnings & Valuation

This table compares RealReal and Kohl’s”s gross revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
RealReal	$692.84 million	1.72	-$41.80 million	($1.12)	-8.73
Kohl’s	$15.43 billion	0.14	$272.00 million	$2.29	8.12

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

Summary

Kohl’s beats RealReal on 9 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 Kohl’s

Kohl’s Corporation operates as an omnichannel retailer in the United States. It offers branded apparel, footwear, accessories, beauty, and home products through its stores and website. The company provides its products primarily under the brand names of Croft & Barrow, Jumping Beans, SO, Sonoma Goods for Life, and Tek Gear, as well as Food Network, LC Lauren Conrad, Nine West, and Simply Vera Vera Wang. Kohl’s Corporation was founded in 1988 and is headquartered in Menomonee Falls, Wisconsin.