Comparing Stitch Fix (NASDAQ:SFIX) & Xcel Brands (NASDAQ:XELB)

Stitch Fix (NASDAQ:SFIX) and Xcel Brands (NASDAQ:XELB) are both small-cap retail/wholesale companies, but which is the better business? We will contrast the two businesses based on the strength of their earnings, profitability, risk, valuation, analyst recommendations, institutional ownership and dividends.

Valuation and Earnings

This table compares Stitch Fix and Xcel Brands”s revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Stitch Fix	$1.34 billion	0.47	-$128.84 million	($0.46)	-10.38
Xcel Brands	$8.26 million	0.46	-$22.40 million	($7.98)	-0.20

Xcel Brands has lower revenue, but higher earnings than Stitch Fix. Stitch Fix is trading at a lower price-to-earnings ratio than Xcel Brands, indicating that it is currently the more affordable of the two stocks.

Analyst Ratings

This is a summary of current recommendations for Stitch Fix and Xcel Brands, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Stitch Fix	0	3	1	0	2.25
Xcel Brands	0	1	0	0	2.00

Stitch Fix presently has a consensus price target of $5.67, suggesting a potential upside of 18.67%. Given Stitch Fix’s stronger consensus rating and higher possible upside, analysts clearly believe Stitch Fix is more favorable than Xcel Brands.

Profitability

This table compares Stitch Fix and Xcel Brands’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Stitch Fix	-4.44%	-18.15%	-7.21%
Xcel Brands	-255.14%	-13.93%	-8.30%

Volatility & Risk

Stitch Fix has a beta of 1.93, suggesting that its share price is 93% more volatile than the S&P 500. Comparatively, Xcel Brands has a beta of 0.81, suggesting that its share price is 19% less volatile than the S&P 500.

Insider & Institutional Ownership

71.0% of Stitch Fix shares are owned by institutional investors. Comparatively, 18.6% of Xcel Brands shares are owned by institutional investors. 17.0% of Stitch Fix shares are owned by company insiders. Comparatively, 40.3% of Xcel Brands shares are owned by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a company will outperform the market over the long term.

Summary

Stitch Fix beats Xcel Brands on 10 of the 14 factors compared between the two stocks.

About Stitch Fix

Stitch Fix, Inc. sells a range of apparel, shoes, and accessories for men, women, and kids through its website and mobile application in the United States and the United Kingdom. It offers denim, dresses, blouses, skirts, shoes, jewelry, and handbags under the Stitch Fix brand. The company was formerly known as rack habit inc. and changed its name to Stitch Fix, Inc. in October 2011. Stitch Fix, Inc. was incorporated in 2011 and is headquartered in San Francisco, California.

About Xcel Brands

Xcel Brands, Inc., together with its subsidiaries, operates as a media and consumer products company in the United States. The company designs, produces, markets, wholesales, and sells branded apparel, footwear, accessories, jewelry, home goods, and other consumer products; and acquires consumer lifestyle brands, including the Isaac Mizrahi, the LOGO by Lori Goldstein, the Judith Ripka, the Halston brand, the C Wonder, the TowerHill by Christie Brinkley brand (the CB brand), and other brands, as well as manages the Longaberger brand. It licenses its brands to third parties; and designs, produces, markets, and distributes through an omni-channel retail sales strategy, which include distribution through interactive television, digital live-stream shopping, brick-and-mortar retail, and e-commerce channels. The company also offers live streaming, social media and other marketing, and public relations support for its brands. In addition, it markets its brands through www.isaacmizrahi.com; www.halston.com; www.judithripka.com; www.cwonder.com; www.lorigoldstein.com; and www.longaberger.com. Xcel Brands, Inc. was founded in 2011 and is headquartered in New York, New York.