Children’s Place (NASDAQ:PLCE – Get Free Report) and ThredUp (NASDAQ:TDUP – Get Free Report) are both small-cap consumer discretionary companies, but which is the superior investment? We will compare the two businesses based on the strength of their valuation, analyst recommendations, profitability, institutional ownership, risk, dividends and earnings.
Profitability
This table compares Children’s Place and ThredUp’s net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets | |
| Children’s Place | -11.82% | N/A | -14.84% |
| ThredUp | -6.65% | -37.30% | -13.03% |
Insider & Institutional Ownership
89.1% of ThredUp shares are held by institutional investors. 0.9% of Children’s Place shares are held by insiders. Comparatively, 23.1% of ThredUp shares are held by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock is poised for long-term growth.
Analyst Ratings
This is a breakdown of current ratings and recommmendations for Children’s Place and ThredUp, as reported by MarketBeat.com.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score | |
| Children’s Place | 1 | 2 | 0 | 0 | 1.67 |
| ThredUp | 1 | 0 | 4 | 0 | 2.60 |
Children’s Place currently has a consensus price target of $3.25, suggesting a potential upside of 733.33%. ThredUp has a consensus price target of $6.55, suggesting a potential upside of 185.40%. Given Children’s Place’s higher probable upside, equities analysts plainly believe Children’s Place is more favorable than ThredUp.
Valuation and Earnings
This table compares Children’s Place and ThredUp”s revenue, earnings per share and valuation.
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio | |
| Children’s Place | $1.21 billion | 0.01 | -$88.26 million | ($5.99) | -0.07 |
| ThredUp | $334.30 million | 0.90 | -$20.21 million | ($0.17) | -13.50 |
ThredUp has lower revenue, but higher earnings than Children’s Place. ThredUp is trading at a lower price-to-earnings ratio than Children’s Place, indicating that it is currently the more affordable of the two stocks.
Risk and Volatility
Children’s Place has a beta of 1.98, indicating that its share price is 98% more volatile than the S&P 500. Comparatively, ThredUp has a beta of 2.11, indicating that its share price is 111% more volatile than the S&P 500.
Summary
ThredUp beats Children’s Place on 10 of the 14 factors compared between the two stocks.
About Children’s Place
The Children’s Place, Inc. engages in the provision of apparel, footwear, accessories, and other items for children. The firm also designs contracts to manufacture and sell fashionable and value-priced merchandise under the brand names of The Children’s Place, Baby Place, and Gymboree. It operates through The Children’s Place U.S. and The Children’s Place International segments. The Children’s Place U.S. segment refers to the company’s U.S. and Puerto Rico-based stores and revenue from its U.S. based wholesale business. The Children’s Place International segment is involved in the Canadian-based stores, revenue from the company’s Canadian-based wholesale business, as well as revenue from international franchisees. The company was founded by David Pulver and Clinton A. Clark in 1969 and is headquartered in Secaucus, NJ.
About ThredUp
ThredUp Inc., together with its subsidiaries, operates an online resale platform in the United States and internationally. Its platform enables consumers to buy and sell primarily secondhand apparel, shoes, and accessories. ThredUp Inc. was incorporated in 2009 and is headquartered in Oakland, California.
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