Contrasting Children’s Place (NASDAQ:PLCE) and Lulu’s Fashion Lounge (NASDAQ:LVLU)

Lulu’s Fashion Lounge (NASDAQ:LVLU) and Children’s Place (NASDAQ:PLCE) are both small-cap retail/wholesale companies, but which is the superior business? We will contrast the two businesses based on the strength of their risk, dividends, earnings, valuation, institutional ownership, profitability and analyst recommendations.

Profitability

This table compares Lulu’s Fashion Lounge and Children’s Place’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Lulu’s Fashion Lounge	-4.86%	-308.76%	-12.91%
Children’s Place	-4.01%	N/A	-6.44%

Analyst Ratings

This is a breakdown of recent recommendations and price targets for Lulu’s Fashion Lounge and Children’s Place, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Lulu’s Fashion Lounge	1	0	0	0	1.00
Children’s Place	1	1	0	0	1.50

Children’s Place has a consensus price target of $4.50, indicating a potential upside of 35.54%. Given Children’s Place’s stronger consensus rating and higher probable upside, analysts plainly believe Children’s Place is more favorable than Lulu’s Fashion Lounge.

Risk & Volatility

Lulu’s Fashion Lounge has a beta of 0.59, suggesting that its stock price is 41% less volatile than the S&P 500. Comparatively, Children’s Place has a beta of 2.01, suggesting that its stock price is 101% more volatile than the S&P 500.

Insider & Institutional Ownership

73.8% of Lulu’s Fashion Lounge shares are owned by institutional investors. 6.8% of Lulu’s Fashion Lounge shares are owned by company insiders. Comparatively, 0.6% of Children’s Place shares are owned by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock will outperform the market over the long term.

Earnings & Valuation

This table compares Lulu’s Fashion Lounge and Children’s Place”s gross revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Lulu’s Fashion Lounge	$282.28 million	0.11	-$55.29 million	($4.91)	-2.31
Children’s Place	$1.39 billion	0.05	-$57.82 million	($2.62)	-1.27

Lulu’s Fashion Lounge has higher earnings, but lower revenue than Children’s Place. Lulu’s Fashion Lounge is trading at a lower price-to-earnings ratio than Children’s Place, indicating that it is currently the more affordable of the two stocks.

Summary

Children’s Place beats Lulu’s Fashion Lounge on 9 of the 13 factors compared between the two stocks.

About Lulu’s Fashion Lounge

Lulu’s Fashion Lounge Holdings, Inc. engages in providing an online website for clothing. It offers retailing of women’s clothing, shoes, and accessories. The company was founded in 1996 and is headquartered in Chico, CA.

About Children’s Place

The Children’s Place, Inc. engages in the provision of apparel, footwear, accessories, and other items for children. The firm also designs contracts to manufacture and sell fashionable and value-priced merchandise under the brand names of The Children’s Place, Baby Place, and Gymboree. It operates through The Children’s Place U.S. and The Children’s Place International segments. The Children’s Place U.S. segment refers to the company’s U.S. and Puerto Rico-based stores and revenue from its U.S. based wholesale business. The Children’s Place International segment is involved in the Canadian-based stores, revenue from the company’s Canadian-based wholesale business, as well as revenue from international franchisees. The company was founded by David Pulver and Clinton A. Clark in 1969 and is headquartered in Secaucus, NJ.