The shares of Rite Aid Corporation (NYSE:RAD) and Tesla, Inc. (NASDAQ:TSLA) were among the active stocks of the last trading sessions. Rite Aid Corporation (NYSE:RAD) soared to 2.59% closing at the price of $1.19 whereas the shares of Tesla, Inc. (NASDAQ:TSLA) soared 0.62% with the increase of 2.13 points closing at the price of $346.41. Rite Aid Corporation has currently decrease -27.88% in its stock over the period of 6-months while its rival Tesla, Inc. added 14.41% in the previous 6-months.
Now we have to analyze the facts that if the stocks were worthy off investors’ money? The facts to analyze here are risks, profitability, returns and price trends.
Returns and Profitability
Profitability and returns are the main reason of investment, the investors are looking for profits that they get and return they should expect over the period of time.
The first and foremost return that is considered while making an investment is the ROI or Return on Investment. The ROI is the ratio between the profit against the cost of investment. Currently the ROI of Rite Aid Corporation (NYSE:RAD) is 3% while the ROI of Tesla, Inc. (NASDAQ:TSLA) is -6.5%. Another figure that is to be considered while analyzing the profitability of a share is its EBITDA margin, RAD’s EBITDA Margin is 8.59 whereas TSLA’s is -135.06.
Both the profitability ratios suggest that Rite Aid Corporation (NYSE:RAD) is more suitable investment in terms of profitability and return.
EPS & Surprise Factor
Rite Aid Corporation (NYSE:RAD) reported $-0.01/share EPS for the previous quarter where analysts were predicting an EPS to be $-0.01/share Thus meeting the analyst Estimates with a Surprise Factor of 0 Percent. While, Tesla, Inc. (NASDAQ:TSLA) reported EPS of $2.9/share in the last quarter. The analysts projected EPS of $-0.19/share depicting a Surprise of 1626.3 Percent.
Taking a look at Earnings per Share, Tesla, Inc. tends to be beating the analyst estimates more than Rite Aid Corporation. so TSLA is more profitable than RAD.
Technical Analysis of Rite Aid Corporation & Tesla, Inc.
Moving average convergence divergence (MACD) shows that Rite Aid Corporation (NYSE:RAD) is on a PRICE RELATIVITY trend While Tesla, Inc. (NASDAQ:TSLA) is on PRICE RELATIVITY trend. The trend for the past 10-days shows that the Rite Aid Corporation was in BULLISH territory and Tesla, Inc. was in BULLISH territory.
RAD’s current statistics gauge that the stock candle is BULLISH with HIGH volatility. While TSLA’s candle is BULLISH with MEDIUM.
EPS Growth Rate: RAD’s -3.69% versus TSLA’s 35%
Another shareholder value can be analyzed through the EPS growth rate; the next 5 years EPS growth rate is predicted by the analysts after the analyzing the previous trends. The next 5 year EPS growth rate of Rite Aid Corporation (NYSE:RAD) is predicted at -3.69% while Tesla, Inc. (NASDAQ:TSLA) stands at 35%. These numbers suggest that TSLA is more suitable investment in terms of EPS growth rate.
Financial Risk and Liquidity Concerns
The current ratio and the debt ratio are the two ratios that show the investor how quickly the company is able to payout its debt and how quickly it can cover its obligations. The current ratio of RAD stands at 1.6 while TSLA is at 0.8 whereas the debt ratio of the prior is 2.42 while the debt ratio of the later is 2.61.
The values of the both ratios suggest that one is more liquid and other investment is more risk free.
While making an investment, another main factor to consider before investing is the analyst recommendation on the scale of 1 to 5 where 1 is strong buy, 2 is buy, 3 is hold, 4 is Sell and 5 is strong sell. Analyst recommend 3.3 for RAD and 2.8 for TSLA which means RAD has Sell rating whereas TSLA has Hold rating.
Another recommendation of analyst that is to be considered worthy is the price target. The mare price or price trend does not suggest the suitability of a stock. The price target set by analyst is also to be considered while investing as it suggests to what extent the stock will rise or fall in the near future. The price target set for RAD is $1.25 which is 4.8% of its current price while TSLA has price target of 324.37 which is -6.79% of its current price.
Valuation is the process of determining the company’s worth for an investor, the valuation ratios give an insight to that worthiness.
RAD currently has price to earning P/E ratio of 0 whereas TSLA has 0 while the forward P/E ratio for the prior stands at 18.31 and for the later it depicts the value of 59.35.
The price to Book P/B for RAD is 0.86, Price to Sale is at 0.06 and for TSLA these ratios stand at 13.13 and 3.35.