Comparing Lulu’s Fashion Lounge (NASDAQ:LVLU) & Tilly’s (NYSE:TLYS)

Lulu’s Fashion Lounge (NASDAQ:LVLU) and Tilly’s (NYSE:TLYS) are both small-cap retail/wholesale companies, but which is the superior business? We will contrast the two businesses based on the strength of their institutional ownership, valuation, dividends, analyst recommendations, earnings, profitability and risk.

Profitability

This table compares Lulu’s Fashion Lounge and Tilly’s’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Lulu’s Fashion Lounge	-15.83%	-251.91%	-15.75%
Tilly’s	-6.24%	-39.59%	-10.17%

Valuation and Earnings

This table compares Lulu’s Fashion Lounge and Tilly’s”s revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Lulu’s Fashion Lounge	$315.89 million	0.11	-$55.29 million	($16.16)	-0.79
Tilly’s	$545.74 million	0.09	-$46.23 million	($1.14)	-1.46

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

Analyst Ratings

This is a breakdown of current recommendations for Lulu’s Fashion Lounge and Tilly’s, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Lulu’s Fashion Lounge	1	1	0	0	1.50
Tilly’s	1	4	0	0	1.80

Lulu’s Fashion Lounge presently has a consensus price target of $15.00, suggesting a potential upside of 17.10%. Tilly’s has a consensus price target of $2.25, suggesting a potential upside of 35.14%. Given Tilly’s’ stronger consensus rating and higher possible upside, analysts plainly believe Tilly’s is more favorable than Lulu’s Fashion Lounge.

Institutional and Insider Ownership

73.8% of Lulu’s Fashion Lounge shares are owned by institutional investors. Comparatively, 76.4% of Tilly’s shares are owned by institutional investors. 6.8% of Lulu’s Fashion Lounge shares are owned by insiders. Comparatively, 2.8% of Tilly’s shares are owned by insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a company is poised for long-term growth.

Risk and Volatility

Lulu’s Fashion Lounge has a beta of 0.37, indicating that its stock price is 63% less volatile than the S&P 500. Comparatively, Tilly’s has a beta of 1.12, indicating that its stock price is 12% more volatile than the S&P 500.

Summary

Tilly’s beats Lulu’s Fashion Lounge on 10 of the 13 factors compared between the two stocks.

About Lulu’s Fashion Lounge

Lulu’s Fashion Lounge Holdings, Inc. engages in providing an online website for clothing. It offers retailing of women’s clothing, shoes, and accessories. The company was founded in 1996 and is headquartered in Chico, CA.

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.