Head to Head Analysis: Zumiez (NASDAQ:ZUMZ) & Urban Outfitters (NASDAQ:URBN)

Zumiez (NASDAQ:ZUMZ) and Urban Outfitters (NASDAQ:URBN) are both retail/wholesale companies, but which is the better business? We will compare the two companies based on the strength of their valuation, dividends, analyst recommendations, risk, earnings, profitability and institutional ownership.

Risk and Volatility

Zumiez has a beta of 0.87, indicating that its stock price is 13% less volatile than the S&P 500. Comparatively, Urban Outfitters has a beta of 1.22, indicating that its stock price is 22% more volatile than the S&P 500.

Profitability

This table compares Zumiez and Urban Outfitters’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Zumiez	1.44%	3.91%	1.90%
Urban Outfitters	7.54%	18.96%	10.46%

Valuation & Earnings

This table compares Zumiez and Urban Outfitters”s top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Zumiez	$929.06 million	0.38	$13.38 million	$0.86	24.48
Urban Outfitters	$6.17 billion	0.95	$464.92 million	$5.07	12.86

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

Insider and Institutional Ownership

95.5% of Zumiez shares are owned by institutional investors. Comparatively, 77.6% of Urban Outfitters shares are owned by institutional investors. 21.2% of Zumiez shares are owned by insiders. Comparatively, 31.6% of Urban Outfitters shares are owned by insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company will outperform the market over the long term.

Analyst Ratings

This is a breakdown of current ratings for Zumiez and Urban Outfitters, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Zumiez	0	3	0	0	2.00
Urban Outfitters	1	8	8	0	2.41

Zumiez currently has a consensus price target of $18.00, suggesting a potential downside of 14.49%. Urban Outfitters has a consensus price target of $86.25, suggesting a potential upside of 32.31%. Given Urban Outfitters’ stronger consensus rating and higher possible upside, analysts plainly believe Urban Outfitters is more favorable than Zumiez.

Summary

Urban Outfitters beats Zumiez on 12 of the 14 factors compared between the two stocks.

About Zumiez

Zumiez Inc. operates as a specialty retailer of apparel, footwear, accessories, and hardgoods for young men and women. The company provides hardgoods, including skateboards, snowboards, bindings, components, and other equipment. It operates stores in the United States, Canada, Europe, and Australia under the names of Zumiez, Blue Tomato, and Fast Times. It operates zumiez.com, zumiez.ca, blue-tomato.com, and fasttimes.com.au e-commerce websites. Zumiez Inc. was founded in 1978 and is headquartered in Lynnwood, Washington.

About Urban Outfitters

Urban Outfitters, Inc. engages in the retail and wholesale of general consumer products. The company operates through three segments: Retail, Wholesale, and Nuuly. It operates Urban Outfitters stores, which offer women's and men's fashion apparel, activewear, intimates, footwear, accessories, home goods, electronics, and beauty products for young adults aged 18 to 28; and Anthropologie stores that provide women's apparel, accessories, intimates, shoes, and home furnishings, as well as gifts, decorative items, and beauty and wellness products for women aged 28 to 45. The company also operates Terrain stores that provide lifestyle home products, garden and outdoor living products, antiques, live plants, flowers, wellness products, and accessories. In addition, it operates Free People retail stores, which offer casual women's apparel, intimates, activewear, shoes, accessories, home products, gifts, and beauty and wellness products for young women aged 25 to 30; and restaurants, as well as women's apparel subscription rental service under the Nuuly brand. Further, the company is involved in the wholesale of young women's contemporary casual apparel, intimates, activewear, and shoes under the Free People brand; and apparel collections under the Urban Outfitters brand. The company serves its customers directly through retail stores, websites, mobile applications, catalogs and customer contact centers, franchisee-owned stores, and department and specialty stores, as well as social media and third-party digital platforms. Urban Outfitters, Inc. was founded in 1970 and is based in Philadelphia, Pennsylvania.