Critical Review: Tandy Leather Factory (OTCMKTS:TLFA) versus Warby Parker (NYSE:WRBY)

Warby Parker (NYSE:WRBY) and Tandy Leather Factory (OTCMKTS:TLFA) are both consumer discretionary companies, but which is the superior business? We will compare the two businesses based on the strength of their profitability, institutional ownership, earnings, analyst recommendations, risk, dividends and valuation.

Analyst Ratings

This is a summary of current ratings and target prices for Warby Parker and Tandy Leather Factory, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Warby Parker	0	5	7	0	2.58
Tandy Leather Factory	0	0	0	0	0.00

Warby Parker presently has a consensus target price of $30.18, suggesting a potential upside of 9.47%. Given Warby Parker’s stronger consensus rating and higher possible upside, equities research analysts plainly believe Warby Parker is more favorable than Tandy Leather Factory.

Volatility & Risk

Warby Parker has a beta of 1.92, meaning that its stock price is 92% more volatile than the S&P 500. Comparatively, Tandy Leather Factory has a beta of 0.72, meaning that its stock price is 28% less volatile than the S&P 500.

Insider & Institutional Ownership

93.2% of Warby Parker shares are owned by institutional investors. Comparatively, 55.2% of Tandy Leather Factory shares are owned by institutional investors. 16.8% of Warby Parker shares are owned by company insiders. Comparatively, 47.7% of Tandy Leather Factory shares are owned by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company is poised for long-term growth.

Profitability

This table compares Warby Parker and Tandy Leather Factory’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Warby Parker	0.85%	3.36%	1.72%
Tandy Leather Factory	0.21%	0.33%	0.23%

Earnings and Valuation

This table compares Warby Parker and Tandy Leather Factory”s revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Warby Parker	$871.91 million	3.42	$1.64 million	$0.07	393.86
Tandy Leather Factory	$82.70 million	0.00	$1.35 million	$0.02	N/A

Warby Parker has higher revenue and earnings than Tandy Leather Factory. Tandy Leather Factory is trading at a lower price-to-earnings ratio than Warby Parker, indicating that it is currently the more affordable of the two stocks.

Summary

Warby Parker beats Tandy Leather Factory on 12 of the 13 factors compared between the two stocks.

About Warby Parker

Warby Parker Inc. provides eyewear products in the United States and Canada. The company offers eyeglasses, sunglasses, light-responsive lenses, blue-light-filtering lenses, non-prescription lenses, and contact lenses. It also provides accessories, such as cases, lenses kit with anti-fog spray, pouches, and anti-fog lens spray through its retail stores, website, and mobile apps. In addition, the company offers eye exams and vision tests. Warby Parker Inc. was incorporated in 2009 and is headquartered in New York, New York.

About Tandy Leather Factory

Tandy Leather Factory, Inc., together with its subsidiaries, operates as a retailer of leather and leathercraft-related items in North America and Spain. It offers leather, hand tools, hardware, kits, liquids, teaching materials, open workbenches, machinery, and related accessories and supplies. The company also manufactures leather laces, cut leather pieces, do-it-yourself kits, thread laces, belt strips and straps, and Craftaids. In addition, it offers production services, including cutting, splitting, and assembly services to business customers. The company sells its products under the Tandy Leather, Eco-Flo, Craftool, CraftoolPro, Dr. Jackson's, and TandyPro brand names through company-owned stores; and orders generated from its websites, such as tandyleather.com, tandyleather.ca, tandyleather.eu, and tandyleather.com.au. It operates 106 retail stores, including 95 stores in the United States; ten stores in Canada; and one store in Spain. The company was formerly known as The Leather Factory, Inc. and changed its name to Tandy Leather Factory, Inc. in 2005. Tandy Leather Factory, Inc. was founded in 1919 and is headquartered in Fort Worth, Texas.