Financial Survey: Victoria’s Secret & Co. (NYSE:VSCO) versus Zalando (OTCMKTS:ZLNDY)

Victoria’s Secret & Co. (NYSE:VSCO) and Zalando (OTCMKTS:ZLNDY) are both retail/wholesale companies, but which is the better stock? We will contrast the two businesses based on the strength of their profitability, valuation, risk, dividends, analyst recommendations, institutional ownership and earnings.

Analyst Recommendations

This is a breakdown of current ratings and target prices for Victoria’s Secret & Co. and Zalando, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Victoria’s Secret & Co.	3	6	4	0	2.08
Zalando	1	1	2	1	2.60

Victoria’s Secret & Co. presently has a consensus target price of $25.45, suggesting a potential upside of 11.03%. Given Victoria’s Secret & Co.’s higher probable upside, equities research analysts plainly believe Victoria’s Secret & Co. is more favorable than Zalando.

Valuation & Earnings

This table compares Victoria’s Secret & Co. and Zalando”s top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Victoria’s Secret & Co.	$6.27 billion	0.29	$165.00 million	$1.80	12.74
Zalando	$11.44 billion	0.64	$271.71 million	$0.57	24.40

Zalando has higher revenue and earnings than Victoria’s Secret & Co.. Victoria’s Secret & Co. is trading at a lower price-to-earnings ratio than Zalando, indicating that it is currently the more affordable of the two stocks.

Profitability

This table compares Victoria’s Secret & Co. and Zalando’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Victoria’s Secret & Co.	2.42%	35.37%	4.51%
Zalando	2.49%	10.19%	3.37%

Volatility and Risk

Victoria’s Secret & Co. has a beta of 2.19, suggesting that its stock price is 119% more volatile than the S&P 500. Comparatively, Zalando has a beta of 1.48, suggesting that its stock price is 48% more volatile than the S&P 500.

Insider & Institutional Ownership

90.3% of Victoria’s Secret & Co. shares are held by institutional investors. 0.5% of Victoria’s Secret & Co. shares are held by insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock will outperform the market over the long term.

Summary

Victoria’s Secret & Co. beats Zalando on 8 of the 15 factors compared between the two stocks.

About Victoria’s Secret & Co.

Victoria’s Secret & Co. operates as a lingerie, clothing and beauty retailer. It offers bras, panties, lingerie, pajamas, sleep, sport and swim apparel, and beauty products. The company was founded in 1963 and is headquartered in Reynoldsburg, OH.

About Zalando

Zalando SE operates an online platform for fashion and lifestyle products. The company operates through Fashion Store and Offprice segments. It provides shoes, apparel, accessories, and beauty products with free delivery and returns, as well as various payment options. The company also sells its products through Lounge by Zalando; and brick-and-mortar outlet stores. It operates in Germany, Austria, Switzerland, Belgium, Croatia, the Czech Republic, Denmark, Estonia, Finland, Hungary, France, Ireland, Italy, Latvia, Lithuania, Luxembourg, the Netherlands, Norway, Poland, Romania, Slovakia, Slovenia, Spain, Sweden, and the United Kingdom. The company was founded in 2008 and is headquartered in Berlin, Germany.