Analyzing Tandy Leather Factory (NASDAQ:TLF) & Tilly’s (NYSE:TLYS)

Tilly’s (NYSE:TLYS) and Tandy Leather Factory (NASDAQ:TLF) are both small-cap consumer discretionary companies, but which is the superior business? We will compare the two businesses based on the strength of their analyst recommendations, earnings, institutional ownership, profitability, dividends, valuation and risk.

Risk and Volatility

Tilly’s has a beta of 0.09, indicating that its stock price is 91% less volatile than the S&P 500. Comparatively, Tandy Leather Factory has a beta of 0.6, indicating that its stock price is 40% less volatile than the S&P 500.

Earnings & Valuation

This table compares Tilly’s and Tandy Leather Factory”s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Tilly’s	$582.94 million	0.22	-$17.45 million	$0.06	71.25
Tandy Leather Factory	$76.32 million	0.24	$9.10 million	$0.06	37.83

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

Analyst Ratings

This is a breakdown of recent ratings and recommmendations for Tilly’s and Tandy Leather Factory, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Tilly’s	0	3	0	0	2.00
Tandy Leather Factory	1	0	0	0	1.00

Tilly’s currently has a consensus target price of $5.50, suggesting a potential upside of 28.65%. Given Tilly’s’ stronger consensus rating and higher possible upside, research analysts clearly believe Tilly’s is more favorable than Tandy Leather Factory.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
Tilly’s	0.34%	2.37%	0.61%
Tandy Leather Factory	0.22%	0.36%	0.21%

Insider & Institutional Ownership

76.4% of Tilly’s shares are owned by institutional investors. Comparatively, 56.4% of Tandy Leather Factory shares are owned by institutional investors. 26.4% of Tilly’s shares are owned by company insiders. Comparatively, 36.2% 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.

Summary

Tilly’s beats Tandy Leather Factory on 8 of the 12 factors compared between the two stocks.

About Tilly’s

Tilly’s, Inc. is a specialty retailer offering casual apparel, footwear, and accessories inspired by surf, skate, snow, and other active lifestyles. Its merchandise is aimed primarily at teens and young adults, as well as children, and includes products from national brands alongside the company’s own brands. The company sells through Tillys stores and its e-commerce website. Its assortment includes clothing, shoes, and accessories for men, women, boys, and girls, with products spanning casual and activewear styles.

About Tandy Leather Factory

Tandy Leather Factory, Inc. is a specialty retailer and distributor of leathercraft supplies. The company serves hobbyists, artisans, small businesses and other customers who create or repair leather goods. Its products include leather hides and sides, leatherworking tools, hardware, dyes, finishes, lacing, adhesives, kits and related craft materials. Tandy also provides instructional resources and project-oriented supplies designed for customers with a range of experience levels. Founded in 1919, the company has operated through a network of retail stores and direct-to-consumer channels, including its online platform and catalog operations.