Head-To-Head Contrast: Zalando (OTCMKTS:ZLNDY) versus Torrid (NYSE:CURV)

Zalando (OTCMKTS:ZLNDY) and Torrid (NYSE:CURV) are both retail/wholesale companies, but which is the superior business? We will contrast the two companies based on the strength of their dividends, analyst recommendations, institutional ownership, risk, profitability, earnings and valuation.

Volatility & Risk

Zalando has a beta of 1.57, meaning that its share price is 57% more volatile than the S&P 500. Comparatively, Torrid has a beta of 1.78, meaning that its share price is 78% more volatile than the S&P 500.

Insider and Institutional Ownership

81.8% of Torrid shares are held by institutional investors. 5.9% of Torrid shares are held by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock is poised for long-term growth.

Analyst Recommendations

This is a breakdown of recent ratings and price targets for Zalando and Torrid, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Zalando	0	0	1	1	3.50
Torrid	2	2	2	0	2.00

Torrid has a consensus price target of $4.75, indicating a potential downside of 7.08%. Given Torrid’s higher possible upside, analysts clearly believe Torrid is more favorable than Zalando.

Valuation and Earnings

This table compares Zalando and Torrid”s top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Zalando	$11.44 billion	0.70	$271.71 million	$0.56	27.09
Torrid	$1.10 billion	0.49	$16.32 million	$0.10	51.12

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

Profitability

This table compares Zalando and Torrid’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Zalando	2.51%	10.45%	3.36%
Torrid	0.92%	-5.31%	2.08%

Summary

Zalando beats Torrid on 9 of the 15 factors compared between the two stocks.

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.

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.