Torrid (NYSE:CURV – Get Free Report) and Lulu’s Fashion Lounge (NASDAQ:LVLU – Get Free Report) are both small-cap retail/wholesale companies, but which is the better investment? We will contrast the two companies based on the strength of their institutional ownership, risk, profitability, earnings, dividends, analyst recommendations and valuation.
Profitability
This table compares Torrid and Lulu’s Fashion Lounge’s net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets | |
| Torrid | 0.30% | -1.69% | 0.70% |
| Lulu’s Fashion Lounge | -17.02% | -125.82% | -17.92% |
Earnings and Valuation
This table compares Torrid and Lulu’s Fashion Lounge”s gross revenue, earnings per share and valuation.
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio | |
| Torrid | $1.07 billion | 0.13 | $16.32 million | $0.04 | 36.00 |
| Lulu’s Fashion Lounge | $315.89 million | 0.04 | -$55.29 million | ($17.72) | -0.27 |
Torrid has higher revenue and earnings than Lulu’s Fashion Lounge. Lulu’s Fashion Lounge is trading at a lower price-to-earnings ratio than Torrid, indicating that it is currently the more affordable of the two stocks.
Risk & Volatility
Torrid has a beta of 1.51, suggesting that its stock price is 51% more volatile than the S&P 500. Comparatively, Lulu’s Fashion Lounge has a beta of 0.38, suggesting that its stock price is 62% less volatile than the S&P 500.
Institutional & Insider Ownership
81.8% of Torrid shares are held by institutional investors. Comparatively, 73.8% of Lulu’s Fashion Lounge shares are held by institutional investors. 5.9% of Torrid shares are held by insiders. Comparatively, 6.8% of Lulu’s Fashion Lounge shares are held by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company is poised for long-term growth.
Analyst Ratings
This is a breakdown of current ratings for Torrid and Lulu’s Fashion Lounge, as reported by MarketBeat.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score | |
| Torrid | 3 | 2 | 1 | 0 | 1.67 |
| Lulu’s Fashion Lounge | 1 | 1 | 0 | 0 | 1.50 |
Torrid currently has a consensus price target of $3.03, suggesting a potential upside of 110.07%. Lulu’s Fashion Lounge has a consensus price target of $15.00, suggesting a potential upside of 208.64%. Given Lulu’s Fashion Lounge’s higher possible upside, analysts clearly believe Lulu’s Fashion Lounge is more favorable than Torrid.
Summary
Torrid beats Lulu’s Fashion Lounge on 12 of the 14 factors compared between the two stocks.
About Torrid
Torrid Holdings Inc. operates in women’s plus-size apparel and intimates market in North America. The company designs, develops, and merchandises its products under the Torrid, Torrid Curve, CURV, and Lovesick brand names. It is involved in the sale of tops, bottoms, dresses, denims, activewear, intimates, sleep wear, swim wear, and outerwear products; and non-apparel products comprising accessories, footwear, and beauty products. The company sells its products directly to consumers through its e-commerce platform and its physical stores. Torrid Holdings Inc. was incorporated in 2019 and is headquartered in City Of Industry, California.
About Lulu’s Fashion Lounge
Lulu’s Fashion Lounge Holdings, Inc. engages in providing an online website for clothing. It offers retailing of women’s clothing, shoes, and accessories. The company was founded in 1996 and is headquartered in Chico, CA.
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