Head to Head Contrast: Tilly’s (NYSE:TLYS) and Vera Bradley (NASDAQ:VRA)

Vera Bradley (NASDAQ:VRA) and Tilly’s (NYSE:TLYS) are both small-cap retail/wholesale companies, but which is the better investment? We will compare the two companies based on the strength of their institutional ownership, earnings, valuation, dividends, profitability, risk and analyst recommendations.

Profitability

This table compares Vera Bradley and Tilly’s’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Vera Bradley	-32.31%	-15.27%	-8.79%
Tilly’s	-8.28%	-48.33%	-12.92%

Risk and Volatility

Vera Bradley has a beta of 1.91, indicating that its share price is 91% more volatile than the S&P 500. Comparatively, Tilly’s has a beta of 1.44, indicating that its share price is 44% more volatile than the S&P 500.

Institutional and Insider Ownership

59.9% of Vera Bradley shares are owned by institutional investors. Comparatively, 76.4% of Tilly’s shares are owned by institutional investors. 12.1% of Vera Bradley shares are owned by insiders. Comparatively, 2.8% of Tilly’s shares are owned by insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company is poised for long-term growth.

Valuation and Earnings

This table compares Vera Bradley and Tilly’s”s gross revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Vera Bradley	$332.53 million	0.20	-$62.19 million	($3.52)	-0.67
Tilly’s	$549.60 million	0.08	-$46.23 million	($1.52)	-0.93

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

Analyst Recommendations

This is a summary of current recommendations for Vera Bradley and Tilly’s, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Vera Bradley	1	2	0	0	1.67
Tilly’s	1	3	0	1	2.20

Tilly’s has a consensus price target of $2.25, suggesting a potential upside of 59.01%. Given Tilly’s’ stronger consensus rating and higher probable upside, analysts plainly believe Tilly’s is more favorable than Vera Bradley.

Summary

Tilly’s beats Vera Bradley on 8 of the 14 factors compared between the two stocks.

About Vera Bradley

Vera Bradley, Inc., together with its subsidiaries, designs, manufactures, and sells women’s handbags, luggage and travel items, fashion and home accessories, and gifts. It operates through three segments: Vera Bradley Direct, Vera Bradley Indirect, and Pura Vida. The company offers bag products, such as totes, crossbodies, satchels, clutches, backpacks, baby bags, and lunch bags; accessories, including ID holders, lanyards, wallets, wristlets, eyewear, scarves, hair accessories, and various technology accessories; bracelets, rings, and necklaces under Pura Vida brand name; and travel products consist of rolling luggage, cosmetics, and travel and packing accessories, as well as travel bags comprising duffel and weekend bags. It also provides home products that include throw blankets, beach towels, and comforters, as well as items, such as mugs and tumblers; apparel/footwear comprising sleepwear, footwear, outerwear, tees and hoodies, and socks; and stationery and merchandising products, as well as freight, licensing, and gift card breakage services. The company sells its Vera Bradley branded products through its full-line and outlet stores in the United States; verabradley.com, an online outlet site; its annual outlet sale in Fort Wayne, Indiana. It sells its Pura Vida branded products through wholesale retailers and Pura Vida websites, including www.puravidabracelets.com, www.puravidabracelets.eu, and www.puravidabracelets.ca; and Vera Bradley Indirect branded products to specialty retail locations, department stores, national accounts, third party e-commerce sites, third-party inventory liquidators, and through licensing agreements. Vera Bradley, Inc. was incorporated in 1982 and is headquartered in Roanoke, Indiana.

About Tilly’s

Tilly’s, Inc. engages in the retail of casual apparel, footwear, and accessories. Its stores are located in retail centers, including malls, lifestyle centers, power centers, community centers, outlet centers, and street-front locations. The company was founded by Hezy Shaked and Tilly Levine in 1982 and is headquartered in Irvine, CA.