Reviewing Chewy (NYSE:CHWY) & Leslie’s (NASDAQ:LESL)

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

Profitability

This table compares Leslie’s and Chewy’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Leslie’s	-21.24%	N/A	-8.96%
Chewy	1.99%	60.02%	8.17%

Risk and Volatility

Leslie’s has a beta of 1.75, suggesting that its stock price is 75% more volatile than the S&P 500. Comparatively, Chewy has a beta of 1.42, suggesting that its stock price is 42% more volatile than the S&P 500.

Insider & Institutional Ownership

93.1% of Chewy shares are owned by institutional investors. 0.5% of Leslie’s shares are owned by insiders. Comparatively, 0.3% of Chewy shares are owned by insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock is poised for long-term growth.

Valuation & Earnings

This table compares Leslie’s and Chewy”s gross revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Leslie’s	$1.24 billion	0.00	-$236.97 million	($27.08)	-0.02
Chewy	$12.60 billion	0.76	$222.80 million	$0.60	38.77

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

Analyst Ratings

This is a breakdown of current ratings and recommmendations for Leslie’s and Chewy, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Leslie’s	2	4	1	0	1.86
Chewy	0	7	18	1	2.77

Leslie’s presently has a consensus price target of $2.85, suggesting a potential upside of 436.72%. Chewy has a consensus price target of $31.50, suggesting a potential upside of 35.43%. Given Leslie’s’ higher probable upside, equities analysts clearly believe Leslie’s is more favorable than Chewy.

Summary

Chewy beats Leslie’s on 12 of the 15 factors compared between the two stocks.

About Leslie’s

Leslie’s, Inc. operates as a direct-to-consumer pool and spa care brand in the United States. The company markets and sells pool and spa supplies and related products and services. It also offers various pool and spa maintenance items, such as chemicals, equipment and parts, cleaning and maintenance equipment, safety, recreational, and fitness related products. In addition, the company provides installation and repair services for pool and spa equipment. It also sells its products through e-commerce websites and third-party marketplaces. The company offers complimentary, commercial-grade in-store, water testing, and analysis services. It serves the residential, professional, and commercial consumers. Leslie’s, Inc. was founded in 1963 and is based in Phoenix, Arizona.

About Chewy

Chewy, Inc., together with its subsidiaries, engages in the pure play e-commerce business in the United States. It provides pet food and treats, pet supplies and pet medications, and other pet-health products, as well as pet services for dogs, cats, fish, birds, small pets, horses, and reptiles through its retail websites and mobile applications. The company was founded in 2010 and is based in Plantation, Florida.