Contrasting Torrid (NYSE:CURV) and GameStop (NYSE:GME)

Torrid (NYSE:CURV) and GameStop (NYSE:GME) are both consumer discretionary companies, but which is the better investment? We will contrast the two companies based on the strength of their valuation, dividends, institutional ownership, risk, earnings, profitability and analyst recommendations.

Volatility and Risk

Torrid has a beta of 0.86, meaning that its stock price is 14% less volatile than the S&P 500. Comparatively, GameStop has a beta of 1.79, meaning that its stock price is 79% more volatile than the S&P 500.

Valuation & Earnings

This table compares Torrid and GameStop”s revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Torrid	$979.93 million	0.23	-$7.03 million	($0.12)	-18.83
GameStop	$3.63 billion	2.30	$418.40 million	$1.32	14.09

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

Profitability

This table compares Torrid and GameStop’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Torrid	-1.28%	N/A	-3.10%
GameStop	20.45%	13.75%	7.08%

Institutional & Insider Ownership

81.8% of Torrid shares are owned by institutional investors. Comparatively, 29.2% of GameStop shares are owned by institutional investors. 6.5% of Torrid shares are owned by insiders. Comparatively, 9.5% of GameStop shares are owned by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock is poised for long-term growth.

Analyst Recommendations

This is a breakdown of current recommendations for Torrid and GameStop, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Torrid	2	5	1	0	1.88
GameStop	0	1	0	0	2.00

Torrid currently has a consensus price target of $1.64, suggesting a potential downside of 27.54%. Given Torrid’s higher probable upside, analysts plainly believe Torrid is more favorable than GameStop.

Summary

GameStop beats Torrid on 11 of the 14 factors compared between the two stocks.

About Torrid

Torrid Holdings Inc. operates in women’s plus-size apparel and intimates market in North America. The company designs, develops, and merchandises its products under the Torrid, Torrid Curve, CURV, and Lovesick brand names. It is involved in the sale of tops, bottoms, dresses, denims, activewear, intimates, sleep wear, swim wear, and outerwear products; and non-apparel products comprising accessories, footwear, and beauty products. The company sells its products directly to consumers through its e-commerce platform and its physical stores. Torrid Holdings Inc. was incorporated in 2019 and is headquartered in City Of Industry, California.

About GameStop

GameStop Corp., a specialty retailer, provides games and entertainment products through its stores and ecommerce platforms in the United States, Canada, Australia, and Europe. The company sells new and pre-owned gaming platforms; accessories, such as controllers, gaming headsets, and virtual reality products; new and pre-owned gaming software; and in-game digital currency, digital downloadable content, and full-game downloads. It sells collectibles comprising apparel, toys, trading cards, gadgets, and other retail products for pop culture and technology enthusiasts, as well as engages in the digital asset wallet and NFT marketplace activities. The company operates stores and ecommerce sites under the GameStop, EB Games, and Micromania brands; and pop culture themed stores that sell collectibles, apparel, gadgets, electronics, toys, and other retail products under the Zing Pop Culture brand, as well as offers Game Informer magazine, a print and digital gaming publication. The company was formerly known as GSC Holdings Corp. GameStop Corp. was founded in 1996 and is headquartered in Grapevine, Texas.