Stitch Fix (NASDAQ:SFIX – Get Free Report) and Citi Trends (NASDAQ:CTRN – Get Free Report) are both small-cap consumer discretionary companies, but which is the better investment? We will contrast the two companies based on the strength of their analyst recommendations, risk, institutional ownership, dividends, profitability, earnings and valuation.
Volatility and Risk
Stitch Fix has a beta of 2.45, suggesting that its share price is 145% more volatile than the S&P 500. Comparatively, Citi Trends has a beta of 1.85, suggesting that its share price is 85% more volatile than the S&P 500.
Valuation & Earnings
This table compares Stitch Fix and Citi Trends”s revenue, earnings per share and valuation.
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio | |
| Stitch Fix | $1.35 billion | 0.28 | -$12.61 million | ($0.10) | -28.15 |
| Citi Trends | $819.96 million | 0.46 | $5.21 million | $0.82 | 55.14 |
Citi Trends has lower revenue, but higher earnings than Stitch Fix. Stitch Fix is trading at a lower price-to-earnings ratio than Citi Trends, indicating that it is currently the more affordable of the two stocks.
Analyst Ratings
This is a summary of recent ratings and target prices for Stitch Fix and Citi Trends, as reported by MarketBeat.com.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score | |
| Stitch Fix | 1 | 6 | 1 | 0 | 2.00 |
| Citi Trends | 1 | 0 | 2 | 0 | 2.33 |
Stitch Fix presently has a consensus price target of $3.40, indicating a potential upside of 20.78%. Citi Trends has a consensus price target of $81.00, indicating a potential upside of 79.14%. Given Citi Trends’ stronger consensus rating and higher probable upside, analysts clearly believe Citi Trends is more favorable than Stitch Fix.
Insider and Institutional Ownership
71.0% of Stitch Fix shares are owned by institutional investors. 18.4% of Stitch Fix shares are owned by company insiders. Comparatively, 9.6% of Citi Trends shares are owned by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a company is poised for long-term growth.
Profitability
This table compares Stitch Fix and Citi Trends’ net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets | |
| Stitch Fix | -0.94% | -5.75% | -2.30% |
| Citi Trends | 0.84% | 8.11% | 2.00% |
Summary
Citi Trends beats Stitch Fix on 10 of the 14 factors compared between the two stocks.
About Stitch Fix
Stitch Fix, Inc. is an online personal styling and apparel company. It combines data science with the expertise of human stylists to recommend clothing and accessories based on customers’ preferences, fit and budget. Customers can receive a curated shipment of items, known as a Fix, and keep what they like while returning the rest. The company also offers Freestyle, an online shopping experience featuring personalized recommendations. Its assortment includes apparel, shoes and accessories from third-party brands as well as its own labels.
About Citi Trends
Citi Trends, Inc. is a U.S. off-price retailer offering apparel, footwear, accessories, beauty products, home goods, toys and seasonal merchandise. Its stores focus on value-conscious shoppers, with product assortments for men, women and children. The company serves customers through retail stores across the United States, emphasizing neighborhoods with diverse and multicultural communities. Merchandise and selection may vary by store and season. Citi Trends traces its roots to Allied Department Stores, founded in 1946, and adopted the Citi Trends name in 2001.
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