Head-To-Head Review: Torrid (NYSE:CURV) versus Fossil Group (NASDAQ:FOSL)

Fossil Group (NASDAQ:FOSL) and Torrid (NYSE:CURV) are both small-cap retail/wholesale companies, but which is the better investment? We will compare the two companies based on the strength of their risk, institutional ownership, profitability, earnings, valuation, analyst recommendations and dividends.

Analyst Recommendations

This is a summary of current recommendations and price targets for Fossil Group and Torrid, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Fossil Group	1	0	1	0	2.00
Torrid	3	4	1	0	1.75

Fossil Group currently has a consensus price target of $5.00, suggesting a potential upside of 69.49%. Torrid has a consensus price target of $3.03, suggesting a potential upside of 142.97%. Given Torrid’s higher possible upside, analysts clearly believe Torrid is more favorable than Fossil Group.

Volatility and Risk

Fossil Group has a beta of 2.17, suggesting that its stock price is 117% more volatile than the S&P 500. Comparatively, Torrid has a beta of 1.48, suggesting that its stock price is 48% more volatile than the S&P 500.

Institutional and Insider Ownership

61.1% of Fossil Group shares are owned by institutional investors. Comparatively, 81.8% of Torrid shares are owned by institutional investors. 7.8% of Fossil Group shares are owned by insiders. Comparatively, 9.8% of Torrid shares are owned by insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company is poised for long-term growth.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
Fossil Group	-5.49%	-12.07%	-2.27%
Torrid	0.30%	-1.69%	0.70%

Earnings and Valuation

This table compares Fossil Group and Torrid”s gross revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Fossil Group	$1.07 billion	0.15	-$102.67 million	($1.27)	-2.32
Torrid	$1.10 billion	0.11	$16.32 million	$0.04	31.13

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

Summary

Torrid beats Fossil Group on 10 of the 13 factors compared between the two stocks.

About Fossil Group

Fossil Group, Inc., together with its subsidiaries, designs, develops, markets, and distributes consumer fashion accessories in the United States, Europe, Asia, and internationally. The company’s products include traditional watches, smartwatches, jewelry, handbags, small leather goods, belts, and sunglasses. It also manufactures and distributes private label brands, as well as branded products purchased for resell in other branded retail stores. The company offers its products under its proprietary brands, such as FOSSIL, SKAGEN, MICHELE, RELIC, and ZODIAC; and under the licensed brands, including ARMANI EXCHANGE, DIESEL, DKNY, EMPORIO ARMANI, KATE SPADE NEW YORK, MICHAEL KORS, TORY BURCH, and Skechers. The company sells its products through company-owned retail and outlet stores, department and specialty retail stores, mass market stores, e-commerce sites, licensed and franchised FOSSIL retail stores, and retail concessions, as well as sells its products on airlines. The company was formerly known as Fossil, Inc. and changed its name to Fossil Group, Inc. in May 2013. Fossil Group, Inc. was founded in 1984 and is headquartered in Richardson, Texas.

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.