Torrid (NYSE:CURV – Get Free Report) and Outdoor (NASDAQ:POWW – Get Free Report) are both small-cap consumer discretionary companies, but which is the better investment? We will contrast the two businesses based on the strength of their valuation, risk, earnings, analyst recommendations, dividends, institutional ownership and profitability.
Insider & Institutional Ownership
81.8% of Torrid shares are held by institutional investors. Comparatively, 26.4% of Outdoor shares are held by institutional investors. 6.5% of Torrid shares are held by insiders. Comparatively, 28.1% of Outdoor shares are held by insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock will outperform the market over the long term.
Profitability
This table compares Torrid and Outdoor’s net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets | |
| Torrid | -0.94% | N/A | -4.49% |
| Outdoor | 12.08% | 1.90% | 1.67% |
Analyst Ratings
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score | |
| Torrid | 2 | 5 | 1 | 0 | 1.88 |
| Outdoor | 0 | 1 | 2 | 1 | 3.00 |
Torrid presently has a consensus price target of $1.81, suggesting a potential downside of 25.26%. Outdoor has a consensus price target of $2.62, suggesting a potential upside of 17.71%. Given Outdoor’s stronger consensus rating and higher possible upside, analysts clearly believe Outdoor is more favorable than Torrid.
Risk and Volatility
Torrid has a beta of 0.69, meaning that its share price is 31% less volatile than the S&P 500. Comparatively, Outdoor has a beta of 0.95, meaning that its share price is 5% less volatile than the S&P 500.
Valuation and Earnings
This table compares Torrid and Outdoor”s top-line revenue, earnings per share and valuation.
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio | |
| Torrid | $948.85 million | 0.25 | -$7.03 million | ($0.09) | -26.94 |
| Outdoor | $53.75 million | 4.82 | -$3.54 million | $0.03 | 74.33 |
Outdoor has lower revenue, but higher earnings than Torrid. Torrid is trading at a lower price-to-earnings ratio than Outdoor, indicating that it is currently the more affordable of the two stocks.
Summary
Outdoor beats Torrid on 13 of the 15 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 Outdoor
AMMO, Inc. designs, produces, and markets ammunition and ammunition component products for sport and recreational shooters, hunters, individuals seeking home or personal protection, manufacturers, and law enforcement and military agencies. The company's products include STREAK Visual Ammunition that enables shooters to see the path of the bullets fired by them; and Stelth Subsonic ammunition primarily for suppressed firearms. It also owns and operates GunBroker.com, an auction site that supports the lawful sale of firearms, ammunition, and hunting/shooting accessories. In addition, the company's products comprises of armor piercing and hard armor piercing incendiary precision ammunition; and ammunition casings for pistol ammunition through large rifle ammunition. The company has a license agreement with Jeff Rann's ammunition for game hunting. AMMO, Inc. was founded in 2016 and is based in Scottsdale, Arizona.
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