Comparing Zumiez (NASDAQ:ZUMZ) and Driven Brands (NASDAQ:DRVN)

Driven Brands (NASDAQ:DRVN) and Zumiez (NASDAQ:ZUMZ) are both consumer discretionary companies, but which is the better stock? We will compare the two businesses based on the strength of their institutional ownership, risk, valuation, earnings, analyst recommendations, profitability and dividends.

Risk and Volatility

Driven Brands has a beta of 0.94, suggesting that its share price is 6% less volatile than the S&P 500. Comparatively, Zumiez has a beta of 1, suggesting that its share price has a similar volatility profile to the S&P 500.

Valuation and Earnings

This table compares Driven Brands and Zumiez”s revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Driven Brands	$1.86 billion	1.07	$140.16 million	$1.04	11.64
Zumiez	$929.06 million	0.23	$13.38 million	$0.72	19.25

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

Analyst Ratings

This is a summary of current ratings and target prices for Driven Brands and Zumiez, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Driven Brands	1	8	6	2	2.53
Zumiez	0	3	0	0	2.00

Driven Brands currently has a consensus price target of $16.23, indicating a potential upside of 34.01%. Given Driven Brands’ stronger consensus rating and higher probable upside, equities analysts clearly believe Driven Brands is more favorable than Zumiez.

Institutional & Insider Ownership

77.1% of Driven Brands shares are owned by institutional investors. Comparatively, 95.5% of Zumiez shares are owned by institutional investors. 4.4% of Driven Brands shares are owned by company insiders. Comparatively, 24.3% of Zumiez shares are owned by company insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company will outperform the market over the long term.

Profitability

This table compares Driven Brands and Zumiez’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Driven Brands	8.61%	24.13%	5.03%
Zumiez	1.36%	3.71%	1.78%

Summary

Driven Brands beats Zumiez on 11 of the 15 factors compared between the two stocks.

About Driven Brands

Driven Brands Holdings Inc., together with its subsidiaries, provides automotive services to retail and commercial customers in the United States, Canada, and internationally. It offers various services, such as paint, collision, glass, repair, car wash, oil change, and maintenance services. The company also distributes automotive parts, including radiators, air conditioning components, and exhaust products to automotive repair shops, auto parts stores, body shops, and other auto repair outlets; windshields and glass accessories through a network of distribution centers; and consumable products, such as oil filters and wiper blades, as well as training services to repair and maintenance, and paint and collision shops. It sells its products and services under the CARSTAR, IMO, MAACO, Meineke Car Care Centers, PH Vitres D’Autos, Take 5 Oil Change, Take 5 Car Wash, Auto Glass Now, Fix Auto USA, and 1-800-Radiator & A/C, Spire Supply, and Automotive Training Institute brands. The company was founded in 1972 and is headquartered in Charlotte, North Carolina.

About Zumiez

Zumiez Inc. operates as a specialty retailer of apparel, footwear, accessories, and hardgoods for young men and women. The company provides hardgoods, including skateboards, snowboards, bindings, components, and other equipment. It operates stores in the United States, Canada, Europe, and Australia under the names of Zumiez, Blue Tomato, and Fast Times. It operates zumiez.com, zumiez.ca, blue-tomato.com, and fasttimes.com.au e-commerce websites. Zumiez Inc. was founded in 1978 and is headquartered in Lynnwood, Washington.