Financial Analysis: Regis (NASDAQ:RGS) and Duolingo (NASDAQ:DUOL)

Duolingo (NASDAQ:DUOL) and Regis (NASDAQ:RGS) are both consumer discretionary companies, but which is the better investment? We will compare the two businesses based on the strength of their earnings, dividends, valuation, profitability, institutional ownership, risk and analyst recommendations.

Institutional & Insider Ownership

91.6% of Duolingo shares are owned by institutional investors. Comparatively, 31.5% of Regis shares are owned by institutional investors. 16.6% of Duolingo shares are owned by company insiders. Comparatively, 4.8% of Regis shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company is poised for long-term growth.

Profitability

This table compares Duolingo and Regis’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Duolingo	35.88%	12.10%	8.24%
Regis	3.09%	4.10%	1.36%

Earnings and Valuation

This table compares Duolingo and Regis”s top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Duolingo	$1.04 billion	6.59	$414.07 million	$8.44	17.32
Regis	$224.49 million	0.31	$6.94 million	$2.42	11.52

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

Risk & Volatility

Duolingo has a beta of 0.89, indicating that its stock price is 11% less volatile than the S&P 500. Comparatively, Regis has a beta of 1.42, indicating that its stock price is 42% more volatile than the S&P 500.

Analyst Recommendations

This is a breakdown of current ratings and target prices for Duolingo and Regis, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Duolingo	1	14	8	1	2.38
Regis	0	1	1	0	2.50

Duolingo currently has a consensus target price of $124.38, indicating a potential downside of 14.91%. Regis has a consensus target price of $42.00, indicating a potential upside of 50.71%. Given Regis’ stronger consensus rating and higher probable upside, analysts plainly believe Regis is more favorable than Duolingo.

Summary

Duolingo beats Regis on 12 of the 15 factors compared between the two stocks.

About Duolingo

Duolingo, Inc. operates as a mobile learning platform in the United States, the United Kingdom, and internationally. The company offers courses in 40 different languages, including Spanish, English, French, German, Italian, Portuguese, Japanese, and Chinese through its Duolingo app. It also provides a digital English language proficiency assessment exam. Duolingo, Inc. was incorporated in 2011 and is headquartered in Pittsburgh, Pennsylvania.

About Regis

Regis Corporation owns, operates, and franchises hairstyling and hair care salons in the United States, the United Kingdom, Canada, and Puerto Rico. The company operates in two segments, Franchise Salons and Company-owned Salons. Its salons provide haircutting and styling, including shampooing and conditioning; hair coloring; and other services, as well as sells various hair care and other beauty products. The company also offers OpenSalon Pro, a back-office salon management system; and Opensalon mobile application. Regis Corporation operates its salons primarily under the SmartStyle, Supercuts, Cost Cutters, Roosters, and First Choice Haircutters names. As of June 30, 2021, the company operated 5,917 salons, such as 5,563 franchised salons, 276 company-owned salons, and 78 non-controlling ownership salons. It also operates accredited cosmetology schools. The company was founded in 1922 and is headquartered in Minneapolis, Minnesota.