Financial Review: Guess’ (NYSE:GES) and Tefron (OTCMKTS:TFRFF)

Guess’ (NYSE:GES) and Tefron (OTCMKTS:TFRFF) are both small-cap consumer discretionary companies, but which is the superior business? We will contrast the two companies based on the strength of their profitability, dividends, analyst recommendations, earnings, risk, valuation and institutional ownership.

Profitability

This table compares Guess’ and Tefron’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Guess’ -4.06% -4.08% -0.94%
Tefron -0.43% -2.83% -0.74%

Risk & Volatility

Guess’ has a beta of 1.81, suggesting that its share price is 81% more volatile than the S&P 500. Comparatively, Tefron has a beta of 0.26, suggesting that its share price is 74% less volatile than the S&P 500.

Insider & Institutional Ownership

66.6% of Guess’ shares are held by institutional investors. Comparatively, 1.0% of Tefron shares are held by institutional investors. 34.9% of Guess’ shares are held by company insiders. Comparatively, 53.3% of Tefron shares are held by company insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock will outperform the market over the long term.

Valuation & Earnings

This table compares Guess’ and Tefron’s top-line revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Guess’ $2.68 billion 0.38 $95.97 million $1.45 10.95
Tefron $155.38 million 0.08 -$1.71 million N/A N/A

Guess’ has higher revenue and earnings than Tefron.

Analyst Recommendations

This is a summary of recent recommendations for Guess’ and Tefron, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Guess’ 0 2 3 0 2.60
Tefron 0 0 0 0 N/A

Guess’ currently has a consensus price target of $16.20, suggesting a potential upside of 2.02%. Given Guess”s higher probable upside, equities research analysts plainly believe Guess’ is more favorable than Tefron.

Summary

Guess’ beats Tefron on 7 of the 11 factors compared between the two stocks.

Guess’ Company Profile

Guess?, Inc. designs, markets, distributes, and licenses lifestyle collections of apparel and accessories for men, women, and children. It operates through five segments: Americas Retail, Americas Wholesale, Europe, Asia, and Licensing. The company's clothing collection includes jeans, pants, skirts, dresses, shorts, blouses, shirts, jackets, knitwear, and intimate apparel. It also grants licenses to design, manufacture, and distribute various products that complement its apparel lines, such as eyewear, watches, handbags, footwear, kids' and infants' apparel, outerwear, fragrance, jewelry, and other fashion accessories. The company markets its products under GUESS, GUESS?, GUESS U.S.A., GUESS Jeans, GUESS? and Triangle Design, MARCIANO, Question Mark and Triangle Design, a stylized G and a stylized M, GUESS Kids, Baby GUESS, YES, G by GUESS, GUESS by MARCIANO, and Gc brand names. It sells its products through direct-to-consumer, wholesale, and licensing distribution channels. As of February 1, 2020, the company directly operated 1,169 retail stores in the Americas, Europe, and Asia. Its partner's distributors operated an additional 560 retail stores worldwide. The company also offers its products through its retail websites. Guess?, Inc. was founded in 1981 and is headquartered in Los Angeles, California.

Tefron Company Profile

Tefron Ltd. produces and sells fashion products in Israel. It offers intimate, active, and lifestyle wear. The company was founded in 1977 and is based in Misgav, Israel.

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