Critical Contrast: Chewy (NYSE:CHWY) and Lands’ End (NASDAQ:LE)

Chewy (NYSE:CHWY) and Lands’ End (NASDAQ:LE) are both consumer discretionary companies, but which is the better business? We will contrast the two businesses based on the strength of their institutional ownership, risk, analyst recommendations, dividends, valuation, earnings and profitability.

Risk and Volatility

Chewy has a beta of 1.42, suggesting that its share price is 42% more volatile than the S&P 500. Comparatively, Lands’ End has a beta of 2.32, suggesting that its share price is 132% more volatile than the S&P 500.

Profitability

This table compares Chewy and Lands’ End’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Chewy	2.09%	60.88%	7.83%
Lands’ End	26.62%	7.96%	3.38%

Valuation & Earnings

This table compares Chewy and Lands’ End”s top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Chewy	$12.60 billion	0.65	$222.80 million	$0.60	33.56
Lands’ End	$1.34 billion	0.23	$5.51 million	$11.24	0.93

Chewy has higher revenue and earnings than Lands’ End. Lands’ End is trading at a lower price-to-earnings ratio than Chewy, indicating that it is currently the more affordable of the two stocks.

Institutional & Insider Ownership

93.1% of Chewy shares are owned by institutional investors. Comparatively, 37.5% of Lands’ End shares are owned by institutional investors. 0.3% of Chewy shares are owned by company insiders. Comparatively, 2.1% of Lands’ End shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company is poised for long-term growth.

Analyst Ratings

This is a summary of current ratings and price targets for Chewy and Lands’ End, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Chewy	0	8	17	1	2.73
Lands’ End	0	1	1	0	2.50

Chewy presently has a consensus target price of $30.82, suggesting a potential upside of 53.05%. Lands’ End has a consensus target price of $20.00, suggesting a potential upside of 90.66%. Given Lands’ End’s higher probable upside, analysts clearly believe Lands’ End is more favorable than Chewy.

Summary

Chewy beats Lands’ End on 10 of the 15 factors compared between the two stocks.

About Chewy

Chewy, Inc., together with its subsidiaries, engages in the pure play e-commerce business in the United States. It provides pet food and treats, pet supplies and pet medications, and other pet-health products, as well as pet services for dogs, cats, fish, birds, small pets, horses, and reptiles through its retail websites and mobile applications. The company was founded in 2010 and is based in Plantation, Florida.

About Lands’ End

Lands’ End, Inc. operates as a digital retailer of apparel, swimwear, outerwear, accessories, footwear, home products, and uniform in the United States, Europe, Asia, and internationally. It operates through U.S. eCommerce, International, Outfitters, Third Party, and Retail segments. The company also sells uniform and logo apparel. It sells its products through e-commerce and company operated stores, as well as through third party distribution channels under the Lands’ End, Lands’ End Lighthouse, Squall, Tugless Tank, Drifter, Outrigger, and Marinac, Beach Living brands, as well as Supima, No-Gape, Starfish, Little Black Suit, Iron Knees, Hyde Park, Year’ Rounder, ClassMate, Willis & Geiger, and ThermaCheck brands. Lands’ End, Inc. was founded in 1963 and is headquartered in Dodgeville, Wisconsin.