Zumiez (NASDAQ:ZUMZ) & Stein Mart (OTCMKTS:SMRTQ) Critical Analysis

Stein Mart (OTCMKTS:SMRTQ) and Zumiez (NASDAQ:ZUMZ) are both retail/wholesale companies, but which is the better investment? We will contrast the two businesses based on the strength of their dividends, earnings, risk, institutional ownership, profitability, analyst recommendations and valuation.

Valuation & Earnings

This table compares Stein Mart and Zumiez”s gross revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Stein Mart	N/A	N/A	N/A	N/A	N/A
Zumiez	$929.06 million	0.46	$13.38 million	$0.86	29.09

Zumiez has higher revenue and earnings than Stein Mart.

Profitability

This table compares Stein Mart and Zumiez’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Stein Mart	N/A	N/A	N/A
Zumiez	1.44%	3.91%	1.90%

Insider and Institutional Ownership

95.5% of Zumiez shares are held by institutional investors. 39.4% of Stein Mart shares are held by insiders. Comparatively, 20.3% of Zumiez shares are held by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company will outperform the market over the long term.

Analyst Ratings

This is a summary of current ratings and price targets for Stein Mart and Zumiez, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Stein Mart	0	0	0	0	0.00
Zumiez	0	3	0	0	2.00

Zumiez has a consensus target price of $18.00, suggesting a potential downside of 28.06%. Given Zumiez’s stronger consensus rating and higher possible upside, analysts plainly believe Zumiez is more favorable than Stein Mart.

Summary

Zumiez beats Stein Mart on 7 of the 8 factors compared between the two stocks.

About Stein Mart

Stein Mart, Inc., a specialty omnichannel off-price retailer, offers designer and name-brand fashion apparels, home décor merchandise, accessories, and shoes at everyday discount prices in the United States. The company's stores also provides endless aisle, a mobile technology to locate products; a SMart Rewards loyalty program; co-branded and private label credit card programs; and electronic gift cards. As of June 3, 2020, it operated 281 stores in 30 states. The company also sells its products through an online retail selling site. Stein Mart, Inc. was founded in 1908 and is headquartered in Jacksonville, Florida. On August 12, 2020, Stein Mart, Inc., along with its affiliates, filed a voluntary petition for reorganization under Chapter 11 in the U.S. Bankruptcy Court for the Middle District of Florida.

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.