Financial Analysis: Li Ning (OTCMKTS:LNNGY) and Citi Trends (NASDAQ:CTRN)

Citi Trends (NASDAQ:CTRN) and Li Ning (OTCMKTS:LNNGY) are both retail/wholesale companies, but which is the better investment? We will contrast the two businesses based on the strength of their earnings, profitability, dividends, risk, valuation, analyst recommendations and institutional ownership.

Profitability

This table compares Citi Trends and Li Ning’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Citi Trends	-2.05%	-22.84%	-5.55%
Li Ning	N/A	N/A	N/A

Analyst Ratings

This is a summary of recent ratings and price targets for Citi Trends and Li Ning, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Citi Trends	1	0	2	0	2.33
Li Ning	0	1	0	0	2.00

Citi Trends presently has a consensus target price of $39.50, suggesting a potential downside of 3.66%. Given Citi Trends’ stronger consensus rating and higher possible upside, equities analysts clearly believe Citi Trends is more favorable than Li Ning.

Valuation and Earnings

This table compares Citi Trends and Li Ning”s gross revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Citi Trends	$753.08 million	0.45	-$43.17 million	($2.00)	-20.50
Li Ning	$3.99 billion	1.61	$419.10 million	N/A	N/A

Li Ning has higher revenue and earnings than Citi Trends.

Risk and Volatility

Citi Trends has a beta of 2.16, indicating that its stock price is 116% more volatile than the S&P 500. Comparatively, Li Ning has a beta of 0.6, indicating that its stock price is 40% less volatile than the S&P 500.

Summary

Li Ning beats Citi Trends on 6 of the 10 factors compared between the two stocks.

About Citi Trends

Citi Trends, Inc. operates as a value retailer of fashion apparel, accessories, and home goods. The company offers apparel, such as fashion sportswear and footwear for men and ladies, as well as apparel for kids, including newborns, infants, toddlers, boys, and girls; sleepwear, lingerie, and scrubs for ladies; and kids uniforms and accessories. It also provides accessories and beauty products that include handbags, luggage, hats, belts, sunglasses, jewelry, and watches, as well as offers outerwear for men and women. In addition, the company offers home and lifestyle products comprising home products for the bedroom, bathroom, kitchen, and decorative accessories; and food, tech, team sports, health and products, as well as seasonal items, books, and toys. Citi Trends, Inc. provides its products primarily to African American and multicultural families in the United States. The company was formerly known as Allied Fashion, Inc. and changed its name to Citi Trends, Inc. in 2001. Citi Trends, Inc. was founded in 1946 and is headquartered in Savannah, Georgia.

About Li Ning

Li Ning Company Limited, a sports brand company, engages in the research and development, design, manufacture, marketing, distribution, and retail of sporting goods in the People’s Republic of China. The company offers sporting goods, including professional and leisure footwear, apparel, equipment, and accessories under the LI-NING brand. It also develops, manufactures, markets, distributes, and/or sells outdoor sports products under the AIGLE brand; table tennis products under the Double Happiness brand name; fashionable fitness products for dance and yoga under the Danskin brand; and badminton products under the Kason brand name. The company also provides brand licensing, administrative, and property management services. It operates conventional stores, flagship stores, China LI-NING stores, LI-NING 1990 stores, factory outlets, and multi-brand stores under the LI-NING brand. The company was founded in 1990 and is headquartered in Beijing, the People’s Republic of China.