Analyzing Children’s Place (NASDAQ:PLCE) and Duluth (NASDAQ:DLTH)

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

Risk and Volatility

Children’s Place has a beta of 1.98, meaning that its share price is 98% more volatile than the S&P 500. Comparatively, Duluth has a beta of 1.35, meaning that its share price is 35% more volatile than the S&P 500.

Earnings and Valuation

This table compares Children’s Place and Duluth”s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Children’s Place	$1.21 billion	0.02	-$88.26 million	($5.99)	-0.19
Duluth	$565.18 million	0.27	-$16.39 million	$0.14	28.50

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

Insider & Institutional Ownership

24.4% of Duluth shares are held by institutional investors. 0.9% of Children’s Place shares are held by insiders. Comparatively, 40.4% of Duluth shares are held by insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock is poised for long-term growth.

Analyst Recommendations

This is a summary of current ratings and target prices for Children’s Place and Duluth, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Children’s Place	1	2	0	0	1.67
Duluth	0	3	0	0	2.00

Children’s Place currently has a consensus target price of $3.25, suggesting a potential upside of 192.79%. Duluth has a consensus target price of $5.00, suggesting a potential upside of 25.31%. Given Children’s Place’s higher possible upside, analysts plainly believe Children’s Place is more favorable than Duluth.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
Children’s Place	-11.82%	N/A	-14.84%
Duluth	1.07%	-3.03%	-1.21%

Summary

Duluth beats Children’s Place on 8 of the 12 factors compared between the two stocks.

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.

About Duluth

Duluth Holdings Inc. sells casual wear, workwear, and accessories for men and women under the Duluth Trading brand in the United States. It provides shirts, pants, underwear, tanks, outerwear, footwear, accessories, and hard goods. The company offers its products under various trademarks, trade names, and service marks, including Alaskan Hardgear, Armachillo, Ballroom, Bucket Master, Cab Commander, Crouch Gusset, Dry on the Fly, Duluth Trading Co, Duluthflex, Fire Hose, Longtail T, No-Yank, No Polo Shirt, Wild Boar Mocs, and Buck Naked. Duluth Holdings Inc. markets its products through its Website, catalogs, and retail stores. As of May 17, 2018, it operated 36 retail stores. The company was formerly known as GEMPLER'S, Inc. Duluth Holdings Inc. was founded in 1989 and is headquartered in Belleville, Wisconsin.