Critical Analysis: Stitch Fix (NASDAQ:SFIX) versus Burberry Group (OTCMKTS:BURBY)

Stitch Fix (NASDAQ:SFIX) and Burberry Group (OTCMKTS:BURBY) are both retail/wholesale companies, but which is the better business? We will contrast the two companies based on the strength of their institutional ownership, dividends, valuation, earnings, risk, analyst recommendations and profitability.

Volatility & Risk

Stitch Fix has a beta of 2.1, indicating that its share price is 110% more volatile than the S&P 500. Comparatively, Burberry Group has a beta of 1.15, indicating that its share price is 15% more volatile than the S&P 500.

Institutional & Insider Ownership

71.0% of Stitch Fix shares are owned by institutional investors. Comparatively, 10.3% of Burberry Group shares are owned by institutional investors. 16.1% of Stitch Fix shares are owned by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company is poised for long-term growth.

Analyst Ratings

This is a breakdown of recent recommendations and price targets for Stitch Fix and Burberry Group, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Stitch Fix	1	4	1	0	2.00
Burberry Group	0	0	0	5	4.00

Stitch Fix currently has a consensus price target of $6.00, suggesting a potential upside of 25.00%. Given Stitch Fix’s higher probable upside, analysts plainly believe Stitch Fix is more favorable than Burberry Group.

Profitability

This table compares Stitch Fix and Burberry Group’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Stitch Fix	-2.23%	-14.38%	-5.88%
Burberry Group	N/A	N/A	N/A

Valuation & Earnings

This table compares Stitch Fix and Burberry Group”s top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Stitch Fix	$1.27 billion	0.51	-$28.74 million	($0.16)	-30.00
Burberry Group	$3.14 billion	1.73	-$95.68 million	N/A	N/A

Stitch Fix has higher earnings, but lower revenue than Burberry Group.

Summary

Burberry Group beats Stitch Fix on 7 of the 13 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 Burberry Group

Burberry Group plc, together with its subsidiaries, manufactures, retails, and wholesales luxury goods under the Burberry brand. The company operates in two segments, Retail/Wholesale and Licensing. It provides womenswear, menswear, childrenswear, beauty, eyewear, shoes, and accessories, as well as leather goods, such as bags. The company also licenses third parties to manufacture and distribute products using the Burberry trademarks. It sells its products through Burberry mainline stores, concessions, outlets, digital commerce, Burberry franchisees, department stores, and multi-brand specialty accounts, as well as through Burberry.com website. It operates in the Asia Pacific, Europe, the Middle East, India, Africa, and the Americas. The company was founded in 1856 and is headquartered in London, the United Kingdom.