Financial Analysis: Destination Maternity (OTCMKTS:DESTQ) and Stitch Fix (NASDAQ:SFIX)

Destination Maternity (OTCMKTS:DESTQ) and Stitch Fix (NASDAQ:SFIX) are both retail/wholesale companies, but which is the better stock? We will compare the two businesses based on the strength of their analyst recommendations, profitability, earnings, dividends, valuation, risk and institutional ownership.

Earnings & Valuation

This table compares Destination Maternity and Stitch Fix”s gross revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Destination Maternity	N/A	N/A	N/A	N/A	N/A
Stitch Fix	$1.27 billion	0.35	-$28.74 million	($0.16)	-20.88

Destination Maternity has higher earnings, but lower revenue than Stitch Fix.

Institutional and Insider Ownership

71.0% of Stitch Fix shares are held by institutional investors. 0.4% of Destination Maternity shares are held by insiders. Comparatively, 16.1% of Stitch Fix shares are held by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company is poised for long-term growth.

Analyst Recommendations

This is a breakdown of recent ratings and target prices for Destination Maternity and Stitch Fix, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Destination Maternity	0	0	0	0	0.00
Stitch Fix	1	4	1	0	2.00

Stitch Fix has a consensus target price of $6.00, suggesting a potential upside of 79.64%. Given Stitch Fix’s stronger consensus rating and higher probable upside, analysts clearly believe Stitch Fix is more favorable than Destination Maternity.

Profitability

This table compares Destination Maternity and Stitch Fix’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Destination Maternity	N/A	N/A	N/A
Stitch Fix	-2.23%	-14.38%	-5.88%

Summary

Stitch Fix beats Destination Maternity on 6 of the 9 factors compared between the two stocks.

About Destination Maternity

Destination Maternity Corp. engages in the design, manufacture and sale of maternity apparel and related accessories. It operates stores under three brands: Motherhood Maternity, A Pea in the Pod, and Destination Maternity. The Motherhood Maternity brand serves maternity apparel business, which is used in special occasion, offering quality merchandise at affordable value. The A Pea in the Pod brand is a contemporary, fashion-forward assortment including a curated selection of exclusive designer labels at premium pricing, offering the mom2be fashionable maternity pieces that reflect her uncompromising sense of style in both casual and career apparel. The Destination Maternity brand relates to a selection of fashion offers all three brands, plus skincare, fitness, and nutritional products to pamper the pregnant woman. The company was founded in 1982 and is headquartered in Moorestown, NJ.

About Stitch Fix

Stitch Fix, Inc. sells a range of apparel, shoes, and accessories for men, women, and kids through its website and mobile application in the United States and the United Kingdom. It offers denim, dresses, blouses, skirts, shoes, jewelry, and handbags under the Stitch Fix brand. The company was formerly known as rack habit inc. and changed its name to Stitch Fix, Inc. in October 2011. Stitch Fix, Inc. was incorporated in 2011 and is headquartered in San Francisco, California.