Critical Survey: Urban Outfitters (URBN) versus Destination XL Group (DXLG)

Urban Outfitters (NASDAQ: URBN) and Destination XL Group (NASDAQ:DXLG) 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, profitability, dividends, valuation, institutional ownership and earnings.

Analyst Recommendations

This is a summary of recent recommendations and price targets for Urban Outfitters and Destination XL Group, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Urban Outfitters 2 12 9 0 2.30
Destination XL Group 0 0 2 0 3.00

Urban Outfitters presently has a consensus target price of $34.27, indicating a potential downside of 18.96%. Destination XL Group has a consensus target price of $3.00, indicating a potential upside of 100.00%. Given Destination XL Group’s stronger consensus rating and higher probable upside, analysts clearly believe Destination XL Group is more favorable than Urban Outfitters.

Earnings and Valuation

This table compares Urban Outfitters and Destination XL Group’s revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Urban Outfitters $3.62 billion 1.27 $108.26 million $1.67 25.32
Destination XL Group $467.98 million 0.16 -$18.82 million N/A N/A

Urban Outfitters has higher revenue and earnings than Destination XL Group.

Risk & Volatility

Urban Outfitters has a beta of 0.52, indicating that its share price is 48% less volatile than the S&P 500. Comparatively, Destination XL Group has a beta of 0.76, indicating that its share price is 24% less volatile than the S&P 500.

Insider and Institutional Ownership

71.2% of Urban Outfitters shares are held by institutional investors. Comparatively, 81.4% of Destination XL Group shares are held by institutional investors. 25.9% of Urban Outfitters shares are held by company insiders. Comparatively, 31.5% of Destination XL Group shares are held by company insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock is poised for long-term growth.

Profitability

This table compares Urban Outfitters and Destination XL Group’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Urban Outfitters 2.99% 14.19% 9.56%
Destination XL Group -4.02% -15.85% -4.58%

Summary

Urban Outfitters beats Destination XL Group on 7 of the 12 factors compared between the two stocks.

About Urban Outfitters

Urban Outfitters, Inc., a lifestyle products and services company, engages in the retail and wholesale of general consumer products. The company retails women's and men's fashion apparel, activewear, intimates, footwear, accessories, home goods, electronics, and beauty products for young adults aged 18 to 28 under the Urban Outfitters brand; and women's casual apparel and accessories, intimates, shoes, and home furnishings, as well as gifts, decorative items, and beauty products for women aged 28 to 45 under the Anthropologie brand. It also provides heirloom quality wedding gowns, bridesmaid frocks, party dresses, assorted jewelry, headpieces, footwear, lingerie, and decorations under the Bhldn brand; and lifestyle home products, garden and outdoor living products, antiques, live plants, flowers, wellness products, and accessories under the Terrain brand, as well as operates food and beverage restaurants. In addition, the company operates Free People retail stores that offer casual women's apparel, activewear, intimates, shoes, accessories, home products, gifts, and beauty and wellness products for young women aged 25 to 30. It serves its customers directly through retail stores, Websites, mobile applications, catalogs, and customer contact centers. As of January 31, 2018, the company operated 45 Urban Outfitters stores in the United States, Canada, and Europe; 226 Anthropologie Group stores, including Anthropologie, Bhldn, and Terrain brands in the United States, Canada, and Europe; 132 Free People stores in the United States and Canada; and 10 food and beverage restaurants. It is also involved in the wholesale business, such as the designing, developing, and marketing of young women's contemporary casual wear and shoes under the Free People brand; and home goods under the Anthropologie brand to approximately 2,100 department and specialty stores worldwide. The company was founded in 1970 and is based in Philadelphia, Pennsylvania.

About Destination XL Group

Destination XL Group, Inc., together with its subsidiaries, operates as a specialty retailer of big and tall men's apparel in the United States and England. Its stores offer sportswear and dresswear; shoes; accessories, such as belts, ties, socks; fashion-neutral items, including jeans, casual slacks, tee-shirts, polo shirts, dress shirts, and suit separates; casual clothing; and lifestyle products comprising chairs, outdoor accessories, travel accessories, bed and bath products, and fitness equipment. The company offers its products under the Destination XL, DXL, DXL outlets, Casual Male XL, Casual Male XL outlets, Rochester Clothing, ShoesXL, and LivingXL trade names. It also provides sportswear and loungewear, sportcoats, dress shirts, neckwear, tailored-related separates, blazers, dress slacks, vintage-screen T-shirts and wovens, camp shirts, printed woven shirts, and relaxed island-inspired pants under various private labels. Destination XL Group, Inc. operates through 192 DXL retail stores, 13 DXL outlet stores, 97 Casual Male XL retail stores, 36 Casual Male XL outlet stores, and 5 Rochester Clothing stores, as well as its DestinationXL.com and bigandtall.com e-commerce sites. The company was formerly known as Casual Male Retail Group, Inc. and changed its name to Destination XL Group, Inc. in February 2013. Destination XL Group, Inc. was founded in 1976 and is headquartered in Canton, Massachusetts.

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