Critical Review: Cherokee (CHKE) & J.Jill (JILL)

Cherokee (NASDAQ: CHKE) and J.Jill (NYSE:JILL) are both small-cap consumer discretionary companies, but which is the superior stock? We will contrast the two businesses based on the strength of their valuation, earnings, institutional ownership, profitability, risk, dividends and analyst recommendations.

Profitability

This table compares Cherokee and J.Jill’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Cherokee -42.20% -0.68% -0.30%
J.Jill 7.93% 22.73% 5.84%

Insider and Institutional Ownership

63.1% of Cherokee shares are held by institutional investors. Comparatively, 24.1% of J.Jill shares are held by institutional investors. 9.2% of Cherokee shares are held by insiders. Comparatively, 8.7% of J.Jill shares are held by insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a company will outperform the market over the long term.

Valuation & Earnings

This table compares Cherokee and J.Jill’s top-line revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Cherokee $40.62 million 0.50 -$7.92 million $0.78 1.86
J.Jill $698.15 million 0.32 $55.37 million $0.79 6.48

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

Analyst Recommendations

This is a summary of current ratings and recommmendations for Cherokee and J.Jill, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Cherokee 0 0 3 0 3.00
J.Jill 0 3 3 0 2.50

Cherokee currently has a consensus target price of $7.83, suggesting a potential upside of 440.23%. J.Jill has a consensus target price of $7.33, suggesting a potential upside of 43.23%. Given Cherokee’s stronger consensus rating and higher possible upside, equities analysts clearly believe Cherokee is more favorable than J.Jill.

Summary

J.Jill beats Cherokee on 7 of the 12 factors compared between the two stocks.

Cherokee Company Profile

Cherokee Inc. markets, manages, and licenses fashion and lifestyle brands for apparel, footwear, home products, and accessories worldwide. It owns or represents Cherokee, Hi-Tec, Magnum, 50 Peaks, Interceptor, Hawk Signature, Tony Hawk, Liz Lange, Completely Me by Liz Lange, Flip Flop Shops, Everyday California, Carole Little, Sideout, and other brands, as well as Saint Tropez-West, Chorus Line, All That Jazz, and Sideout Sport names. As of January 28, 2017, the company had 124 continuing license agreements covering in approximately 110 countries. Cherokee Inc. was founded in 1988 and is headquartered in Sherman Oaks, California.

J.Jill Company Profile

J.Jill, Inc. operates as a specialty retailer of women's apparel under the J.Jill brand in the United States. It offers knit and woven tops, bottoms, and dresses, as well as sweaters and outerwear; and complementary footwear and accessories, including scarves, jewelry, and hosiery for misses, petite, and women. Its customers include women in 40-65 age range. The company markets its products through retail stores, Website, and catalog. As of January 28, 2017, it operated 275 stores in 43 states. J.Jill, Inc. is headquartered in Quincy, Massachusetts.

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