Comparing Build-A-Bear Workshop (NYSE:BBW) & Five Below (NASDAQ:FIVE)

Build-A-Bear Workshop (NYSE:BBW) and Five Below (NASDAQ:FIVE) are both retail/wholesale companies, but which is the better investment? We will contrast the two businesses based on the strength of their risk, analyst recommendations, valuation, institutional ownership, profitability, earnings and dividends.

Institutional & Insider Ownership

79.3% of Build-A-Bear Workshop shares are owned by institutional investors. 5.8% of Build-A-Bear Workshop shares are owned by company insiders. Comparatively, 1.9% of Five Below shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock is poised for long-term growth.

Volatility & Risk

Build-A-Bear Workshop has a beta of 0.7, suggesting that its stock price is 30% less volatile than the S&P 500. Comparatively, Five Below has a beta of 1.04, suggesting that its stock price is 4% more volatile than the S&P 500.

Analyst Recommendations

This is a breakdown of current ratings and recommmendations for Build-A-Bear Workshop and Five Below, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Build-A-Bear Workshop	0	0	3	0	3.00
Five Below	1	14	6	0	2.24

Build-A-Bear Workshop currently has a consensus target price of $51.33, indicating a potential downside of 4.67%. Five Below has a consensus target price of $113.30, indicating a potential downside of 14.73%. Given Build-A-Bear Workshop’s stronger consensus rating and higher probable upside, equities research analysts plainly believe Build-A-Bear Workshop is more favorable than Five Below.

Valuation and Earnings

This table compares Build-A-Bear Workshop and Five Below”s revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Build-A-Bear Workshop	$496.40 million	1.43	$51.78 million	$4.16	12.94
Five Below	$3.88 billion	1.89	$253.61 million	$4.77	27.86

Five Below has higher revenue and earnings than Build-A-Bear Workshop. Build-A-Bear Workshop is trading at a lower price-to-earnings ratio than Five Below, indicating that it is currently the more affordable of the two stocks.

Profitability

This table compares Build-A-Bear Workshop and Five Below’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Build-A-Bear Workshop	10.91%	40.74%	18.98%
Five Below	6.52%	17.00%	6.89%

About Build-A-Bear Workshop

Build-A-Bear Workshop, Inc. operates as a multi-channel retailer of plush animals and related products in the United States, Canada, the United Kingdom, Ireland, and internationally. The company operates through three segments: Direct-to-Consumer, Commercial, and International Franchising. Its merchandise comprises various styles of plush products to be stuffed, pre-stuffed plush products, and sounds and scents that can be added to the stuffed animals, as well as range of clothing, shoes and accessories, and other toy and novelty items, including family sleepwear. The company operates its stores under the Build-A-Bear Workshop brand name; and sells its products through its e-commerce sites and third-party marketplace sites. Build-A-Bear Workshop, Inc. was founded in 1997 and is headquartered in Saint Louis, Missouri.

About Five Below

Five Below, Inc. operates as a specialty value retailer in the United States. The company offers range of accessories, which includes novelty socks, sunglasses, jewelry, scarves, gloves, hair accessories, athletic tops and bottoms, and t-shirts, as well as nail polish, lip gloss, fragrance, and branded cosmetics; and personalized living space products, such as lamps, posters, frames, fleece blankets, plush items, pillows, candles, incense, lighting, novelty décor, accent furniture, and related items, as well as provides storage options. It provides assortment of sports balls, team sports merchandise, and fitness accessories comprising hand weights, jump ropes, and gym balls; various games, such as board games, puzzles, collectibles, and toys, including remote control; and summer season sports, which includes pool, beach, and outdoor toys, as well as games and accessories. In addition, the company offers accessories for cell phones, tablets, audio, and computers, as well as cases, chargers, headphones, and other related items; and media products including books, video games, and DVDs. It also provides assortment of craft activity kits, and arts and crafts supplies, such as crayons, markers, and stickers; and school products comprising backpacks, fashion notebooks and journals, novelty pens and pencils, and locker accessories. Further, the company offers party products, which includes party goods, decorations, gag gifts, and greeting cards, as well as every day and special occasion merchandise; assortment of classic and novelty candy bars, movie-size box candy, seasonal-related candy, and gum and snack food products, as well as sells chilled drinks through coolers; and provides seasonally specific items used to celebrate and decorate for events. The company was formerly known as Cheap Holdings, Inc. and changed its name to Five Below, Inc. in August 2002. Five Below, Inc. was incorporated in 2002 and is headquartered in Philadelphia, Pennsylvania.