Lulu’s Fashion Lounge (NASDAQ:LVLU – Get Free Report) and Xcel Brands (NASDAQ:XELB – Get Free Report) are both small-cap retail/wholesale companies, but which is the better stock? We will compare the two businesses based on the strength of their dividends, institutional ownership, risk, valuation, earnings, profitability and analyst recommendations.
Risk and Volatility
Lulu’s Fashion Lounge has a beta of 0.37, meaning that its share price is 63% less volatile than the S&P 500. Comparatively, Xcel Brands has a beta of 0.9, meaning that its share price is 10% less volatile than the S&P 500.
Profitability
This table compares Lulu’s Fashion Lounge and Xcel Brands’ net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets | |
| Lulu’s Fashion Lounge | -15.83% | -251.91% | -15.75% |
| Xcel Brands | -437.09% | -51.46% | -24.73% |
Analyst Recommendations
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score | |
| Lulu’s Fashion Lounge | 1 | 1 | 0 | 0 | 1.50 |
| Xcel Brands | 1 | 1 | 1 | 0 | 2.00 |
Lulu’s Fashion Lounge presently has a consensus target price of $15.00, suggesting a potential downside of 42.66%. Xcel Brands has a consensus target price of $3.00, suggesting a potential upside of 92.31%. Given Xcel Brands’ stronger consensus rating and higher possible upside, analysts clearly believe Xcel Brands is more favorable than Lulu’s Fashion Lounge.
Valuation & Earnings
This table compares Lulu’s Fashion Lounge and Xcel Brands”s top-line revenue, earnings per share (EPS) and valuation.
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio | |
| Lulu’s Fashion Lounge | $315.89 million | 0.23 | -$55.29 million | ($16.16) | -1.62 |
| Xcel Brands | $8.26 million | 0.90 | -$22.40 million | ($7.86) | -0.20 |
Xcel Brands has lower revenue, but higher earnings than Lulu’s Fashion Lounge. Lulu’s Fashion Lounge is trading at a lower price-to-earnings ratio than Xcel Brands, indicating that it is currently the more affordable of the two stocks.
Institutional & Insider Ownership
73.8% of Lulu’s Fashion Lounge shares are held by institutional investors. Comparatively, 18.6% of Xcel Brands shares are held by institutional investors. 6.8% of Lulu’s Fashion Lounge shares are held by insiders. Comparatively, 29.5% of Xcel Brands shares are held by insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock is poised for long-term growth.
Summary
Xcel Brands beats Lulu’s Fashion Lounge on 10 of the 14 factors compared between the two stocks.
About Lulu’s Fashion Lounge
Lulu’s Fashion Lounge Holdings, Inc. engages in providing an online website for clothing. It offers retailing of women’s clothing, shoes, and accessories. The company was founded in 1996 and is headquartered in Chico, CA.
About Xcel Brands
Xcel Brands, Inc., together with its subsidiaries, operates as a media and consumer products company in the United States. The company designs, produces, markets, wholesales, and sells branded apparel, footwear, accessories, jewelry, home goods, and other consumer products; and acquires consumer lifestyle brands, including the Isaac Mizrahi, the LOGO by Lori Goldstein, the Judith Ripka, the Halston brand, the C Wonder, the TowerHill by Christie Brinkley brand (the CB brand), and other brands, as well as manages the Longaberger brand. It licenses its brands to third parties; and designs, produces, markets, and distributes through an omni-channel retail sales strategy, which include distribution through interactive television, digital live-stream shopping, brick-and-mortar retail, and e-commerce channels. The company also offers live streaming, social media and other marketing, and public relations support for its brands. In addition, it markets its brands through www.isaacmizrahi.com; www.halston.com; www.judithripka.com; www.cwonder.com; www.lorigoldstein.com; and www.longaberger.com. Xcel Brands, Inc. was founded in 2011 and is headquartered in New York, New York.
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