Stitch Fix (NASDAQ:SFIX – Get Free Report) and Zumiez (NASDAQ:ZUMZ – Get Free Report) are both small-cap retail/wholesale companies, but which is the superior investment? We will compare the two companies based on the strength of their profitability, dividends, risk, institutional ownership, valuation, analyst recommendations and earnings.
Volatility & Risk
Stitch Fix has a beta of 2.2, indicating that its share price is 120% more volatile than the S&P 500. Comparatively, Zumiez has a beta of 1.06, indicating that its share price is 6% more volatile than the S&P 500.
Earnings & Valuation
This table compares Stitch Fix and Zumiez”s revenue, earnings per share and valuation.
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio | |
| Stitch Fix | $1.27 billion | 0.45 | -$28.74 million | ($0.46) | -9.20 |
| Zumiez | $900.25 million | 0.49 | -$1.71 million | ($0.01) | -2,595.00 |
Zumiez has lower revenue, but higher earnings than Stitch Fix. Zumiez is trading at a lower price-to-earnings ratio than Stitch Fix, indicating that it is currently the more affordable of the two stocks.
Insider & Institutional Ownership
71.0% of Stitch Fix shares are owned by institutional investors. Comparatively, 95.4% of Zumiez shares are owned by institutional investors. 16.1% of Stitch Fix shares are owned by insiders. Comparatively, 21.2% of Zumiez shares are owned by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company is poised for long-term growth.
Analyst Ratings
This is a breakdown of recent recommendations and price targets for Stitch Fix and Zumiez, as provided by MarketBeat.com.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score | |
| Stitch Fix | 1 | 4 | 1 | 1 | 2.29 |
| Zumiez | 1 | 2 | 0 | 0 | 1.67 |
Stitch Fix presently has a consensus target price of $6.00, indicating a potential upside of 41.84%. Zumiez has a consensus target price of $18.00, indicating a potential downside of 30.64%. Given Stitch Fix’s stronger consensus rating and higher probable upside, research analysts clearly believe Stitch Fix is more favorable than Zumiez.
Profitability
This table compares Stitch Fix and Zumiez’s net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets | |
| Stitch Fix | -2.27% | -14.57% | -5.93% |
| Zumiez | 0.06% | 0.19% | 0.09% |
Summary
Zumiez beats Stitch Fix on 8 of the 15 factors compared between the two stocks.
About Stitch Fix
Stitch Fix, Inc. sells a range of apparel, shoes, and accessories for men, women, and kids through its website and mobile application in the United States and the United Kingdom. It offers denim, dresses, blouses, skirts, shoes, jewelry, and handbags under the Stitch Fix brand. The company was formerly known as rack habit inc. and changed its name to Stitch Fix, Inc. in October 2011. Stitch Fix, Inc. was incorporated in 2011 and is headquartered in San Francisco, California.
About Zumiez
Zumiez Inc. operates as a specialty retailer of apparel, footwear, accessories, and hardgoods for young men and women. The company provides hardgoods, including skateboards, snowboards, bindings, components, and other equipment. It operates stores in the United States, Canada, Europe, and Australia under the names of Zumiez, Blue Tomato, and Fast Times. It operates zumiez.com, zumiez.ca, blue-tomato.com, and fasttimes.com.au e-commerce websites. Zumiez Inc. was founded in 1978 and is headquartered in Lynnwood, Washington.
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