Financial Survey: Zumiez (ZUMZ) and Tilly’s (TLYS)

Zumiez (NASDAQ: ZUMZ) and Tilly’s (NYSE:TLYS) are both small-cap retail/wholesale companies, but which is the superior stock? We will compare the two companies based on the strength of their profitability, valuation, dividends, earnings, institutional ownership, analyst recommendations and risk.

Institutional and Insider Ownership

74.8% of Zumiez shares are owned by institutional investors. Comparatively, 47.0% of Tilly’s shares are owned by institutional investors. 27.7% of Zumiez shares are owned by insiders. Comparatively, 48.3% of Tilly’s 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.

Earnings & Valuation

This table compares Zumiez and Tilly’s’ revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Zumiez $927.40 million 0.68 $26.80 million $1.10 22.45
Tilly’s $576.90 million 0.59 $14.70 million $0.65 17.86

Zumiez has higher revenue and earnings than Tilly’s. Tilly’s is trading at a lower price-to-earnings ratio than Zumiez, indicating that it is currently the more affordable of the two stocks.

Analyst Recommendations

This is a summary of recent ratings and recommmendations for Zumiez and Tilly’s, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Zumiez 0 4 2 0 2.33
Tilly’s 0 0 2 0 3.00

Zumiez currently has a consensus price target of $24.40, suggesting a potential downside of 1.21%. Tilly’s has a consensus price target of $17.00, suggesting a potential upside of 46.43%. Given Tilly’s’ stronger consensus rating and higher possible upside, analysts plainly believe Tilly’s is more favorable than Zumiez.

Profitability

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

Net Margins Return on Equity Return on Assets
Zumiez 2.89% 8.38% 5.71%
Tilly’s 2.55% 11.03% 6.52%

Risk & Volatility

Zumiez has a beta of 1.07, meaning that its stock price is 7% more volatile than the S&P 500. Comparatively, Tilly’s has a beta of -0.26, meaning that its stock price is 126% less volatile than the S&P 500.

Summary

Zumiez beats Tilly’s on 8 of the 13 factors compared between the two stocks.

About Zumiez

Zumiez Inc., together with its subsidiaries, operates as a specialty retailer of apparel, footwear, accessories, and hardgoods for young men and women. Its hardgoods include skateboards, snowboards, bindings, components, and other equipment. As of February 3, 2018, the company operated 698 stores, including 607 stores in the United States, 50 stores in Canada, 34 stores in Europe, and 7 stores in Australia under the names of Zumiez, Blue Tomato, and Fast Times. It also operates zumiez.com, blue-tomato.com, and fasttimes.com.au e-commerce Websites. The company was founded in 1978 and is headquartered in Lynnwood, Washington.

About Tilly’s

Tilly's, Inc. retails casual apparel, footwear, and accessories for young men and women, and boys and girls in the United States. Its apparel merchandise includes tops, outerwear, bottoms, and dresses; and accessories merchandise comprises backpacks, hats, sunglasses, headphones, handbags, watches, jewelry, and others. The company also provides third-party merchandise assortment across its various product categories. As of February 3, 2018, it operated 219 stores in 32 states. The company also sells its products through its e-commerce Website, tillys.com. Tilly's, Inc.was founded in 1982 and is headquartered in Irvine, California.

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