Stitch Fix (NASDAQ:SFIX) & Urban Outfitters (NASDAQ:URBN) Head-To-Head Analysis

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

Profitability

This table compares Urban Outfitters and Stitch Fix’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Urban Outfitters	7.48%	18.92%	10.45%
Stitch Fix	-1.43%	-9.35%	-3.78%

Insider and Institutional Ownership

77.6% of Urban Outfitters shares are held by institutional investors. Comparatively, 71.0% of Stitch Fix shares are held by institutional investors. 32.1% of Urban Outfitters shares are held by company insiders. Comparatively, 16.1% of Stitch Fix shares are held by company insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock is poised for long-term growth.

Earnings and Valuation

This table compares Urban Outfitters and Stitch Fix”s revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Urban Outfitters	$6.17 billion	0.97	$464.92 million	$5.21	13.41
Stitch Fix	$1.27 billion	0.38	-$28.74 million	($0.08)	-45.25

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

Volatility and Risk

Urban Outfitters has a beta of 1.22, indicating that its stock price is 22% more volatile than the S&P 500. Comparatively, Stitch Fix has a beta of 2.26, indicating that its stock price is 126% more volatile than the S&P 500.

Analyst Ratings

This is a breakdown of current recommendations for Urban Outfitters and Stitch Fix, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Urban Outfitters	0	6	7	1	2.64
Stitch Fix	1	4	1	0	2.00

Urban Outfitters currently has a consensus price target of $87.00, suggesting a potential upside of 24.55%. Stitch Fix has a consensus price target of $5.12, suggesting a potential upside of 41.57%. Given Stitch Fix’s higher possible upside, analysts clearly believe Stitch Fix is more favorable than Urban Outfitters.

Summary

Urban Outfitters beats Stitch Fix on 13 of the 15 factors compared between the two stocks.

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.

About Stitch Fix

Stitch Fix, Inc. sells a range of apparel, shoes, and accessories for men, women, and kids through its website and mobile application in the United States and the United Kingdom. It offers denim, dresses, blouses, skirts, shoes, jewelry, and handbags under the Stitch Fix brand. The company was formerly known as rack habit inc. and changed its name to Stitch Fix, Inc. in October 2011. Stitch Fix, Inc. was incorporated in 2011 and is headquartered in San Francisco, California.