Critical Analysis: RideNow Group (NASDAQ:RDNW) vs. Wayfair (NYSE:W)

Wayfair (NYSE:W) and RideNow Group (NASDAQ:RDNW) are both retail/wholesale companies, but which is the better business? We will compare the two companies based on the strength of their profitability, analyst recommendations, dividends, earnings, risk, valuation and institutional ownership.

Analyst Ratings

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

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Wayfair	1	10	18	1	2.63
RideNow Group	1	2	0	0	1.67

Wayfair currently has a consensus target price of $99.68, suggesting a potential upside of 8.30%. RideNow Group has a consensus target price of $7.50, suggesting a potential upside of 8.38%. Given RideNow Group’s higher probable upside, analysts plainly believe RideNow Group is more favorable than Wayfair.

Risk and Volatility

Wayfair has a beta of 3.02, suggesting that its stock price is 202% more volatile than the S&P 500. Comparatively, RideNow Group has a beta of 1.15, suggesting that its stock price is 15% more volatile than the S&P 500.

Insider & Institutional Ownership

89.7% of Wayfair shares are owned by institutional investors. Comparatively, 66.1% of RideNow Group shares are owned by institutional investors. 18.4% of Wayfair shares are owned by insiders. Comparatively, 55.3% of RideNow Group shares are owned by insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a company will outperform the market over the long term.

Profitability

This table compares Wayfair and RideNow Group’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Wayfair	-2.41%	-2.20%	1.92%
RideNow Group	-4.28%	-2,628.57%	-1.85%

Valuation and Earnings

This table compares Wayfair and RideNow Group”s top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Wayfair	$12.46 billion	0.98	-$313.00 million	($2.34)	-39.33
RideNow Group	$1.10 billion	0.24	-$52.40 million	($1.24)	-5.58

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

Summary

Wayfair beats RideNow Group on 10 of the 15 factors compared between the two stocks.

About Wayfair

Wayfair Inc. provides e-commerce business in the United States and internationally. The company offers approximately thirty million products for the home sector. It offers online selections of furniture, décor, housewares, and home improvement products through its sites consisting of Wayfair, Joss & Main, AllModern, Birch Lane, Perigold, and Wayfair Professional. The company offers its products under the Three Posts and Mercury Row brand name. The company was founded in 2002 and is headquartered in Boston, Massachusetts.

About RideNow Group

RumbleOn, Inc. primarily operates as a powersports retailer in the United States. It operates in two segments, Powersports and Vehicle Transportation Services. The Powersports segment provides new and pre-owned motorcycles, all-terrain vehicles, utility terrain or side-by-side vehicles, personal watercraft, snowmobiles, and other powersports products. It also offers parts, apparel, accessories, finance and insurance products and services, and aftermarket products, as well as repair and maintenance services. The Vehicle Transportation Services segment provides asset-light transportation brokerage services facilitating automobile transportation. The company was formerly known as Smart Server, Inc. and changed its name to RumbleOn, Inc. in February 2017. The company was incorporated in 2013 and is based in Irving, Texas.