Analyzing Lulu’s Fashion Lounge (NASDAQ:LVLU) and Shoe Carnival (NASDAQ:SHOE)

Lulu’s Fashion Lounge (NASDAQ:LVLU) and Shoe Carnival (NASDAQ:SHOE) are both small-cap consumer discretionary companies, but which is the better stock? We will contrast the two businesses based on the strength of their profitability, institutional ownership, valuation, analyst recommendations, dividends, earnings and risk.

Profitability

This table compares Lulu’s Fashion Lounge and Shoe Carnival’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Lulu’s Fashion Lounge	-3.17%	-946.15%	-8.73%
Shoe Carnival	2.20%	5.32%	3.08%

Analyst Ratings

This is a breakdown of recent ratings and price targets for Lulu’s Fashion Lounge and Shoe Carnival, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Lulu’s Fashion Lounge	1	0	0	0	1.00
Shoe Carnival	1	1	0	1	2.33

Shoe Carnival has a consensus price target of $22.00, indicating a potential upside of 69.23%. Given Shoe Carnival’s stronger consensus rating and higher probable upside, analysts clearly believe Shoe Carnival is more favorable than Lulu’s Fashion Lounge.

Institutional & Insider Ownership

73.8% of Lulu’s Fashion Lounge shares are held by institutional investors. Comparatively, 66.0% of Shoe Carnival shares are held by institutional investors. 7.8% of Lulu’s Fashion Lounge shares are held by insiders. Comparatively, 33.6% of Shoe Carnival shares are held by insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock will outperform the market over the long term.

Valuation & Earnings

This table compares Lulu’s Fashion Lounge and Shoe Carnival”s gross revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Lulu’s Fashion Lounge	$261.95 million	0.11	-$13.71 million	($2.94)	-3.55
Shoe Carnival	$1.14 billion	0.31	$52.27 million	$0.88	14.77

Shoe Carnival has higher revenue and earnings than Lulu’s Fashion Lounge. Lulu’s Fashion Lounge is trading at a lower price-to-earnings ratio than Shoe Carnival, indicating that it is currently the more affordable of the two stocks.

Risk and Volatility

Lulu’s Fashion Lounge has a beta of 0.26, suggesting that its stock price is 74% less volatile than the S&P 500. Comparatively, Shoe Carnival has a beta of 1.4, suggesting that its stock price is 40% more volatile than the S&P 500.

Summary

Shoe Carnival beats Lulu’s Fashion Lounge on 13 of the 14 factors compared between the two stocks.

About Lulu’s Fashion Lounge

Lulu’s Fashion Lounge Holdings, Inc. engages in providing an online website for clothing. It offers retailing of women’s clothing, shoes, and accessories. The company was founded in 1996 and is headquartered in Chico, CA.

About Shoe Carnival

Shoe Carnival, Inc., together with its subsidiaries, operates as a family footwear retailer in the United States. The company offers range of dress, casual, work, and athletic shoes, as well as sandals and boots for men, women, and children; and various accessories. The company also operates stores, and sells its products through online shopping at shoecarnival.com, as well as through mobile app. Shoe Carnival, Inc. was founded in 1978 and is headquartered in Evansville, Indiana.