Contrasting Warby Parker (NYSE:WRBY) and Lulu’s Fashion Lounge (NASDAQ:LVLU)

Lulu’s Fashion Lounge (NASDAQ:LVLU) and Warby Parker (NYSE:WRBY) are both consumer discretionary companies, but which is the better investment? We will compare the two businesses based on the strength of their analyst recommendations, earnings, risk, dividends, profitability, institutional ownership and valuation.

Volatility and Risk

Lulu’s Fashion Lounge has a beta of 0.28, suggesting that its stock price is 72% less volatile than the S&P 500. Comparatively, Warby Parker has a beta of 1.95, suggesting that its stock price is 95% more volatile than the S&P 500.

Earnings and Valuation

This table compares Lulu’s Fashion Lounge and Warby Parker”s revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Lulu’s Fashion Lounge	$282.28 million	0.12	-$13.71 million	($2.94)	-3.87
Warby Parker	$871.91 million	2.82	$1.64 million	$0.07	324.19

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

Profitability

This table compares Lulu’s Fashion Lounge and Warby Parker’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%
Warby Parker	0.85%	3.36%	1.72%

Analyst Ratings

This is a summary of recent ratings and target prices for Lulu’s Fashion Lounge and Warby Parker, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Lulu’s Fashion Lounge	1	0	0	0	1.00
Warby Parker	1	3	6	1	2.64

Warby Parker has a consensus target price of $30.00, indicating a potential upside of 32.20%. Given Warby Parker’s stronger consensus rating and higher possible upside, analysts clearly believe Warby Parker 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, 93.2% of Warby Parker shares are held by institutional investors. 7.8% of Lulu’s Fashion Lounge shares are held by insiders. Comparatively, 16.8% of Warby Parker shares are held by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock is poised for long-term growth.

Summary

Warby Parker beats Lulu’s Fashion Lounge on 15 of the 15 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 Warby Parker

Warby Parker Inc. provides eyewear products in the United States and Canada. The company offers eyeglasses, sunglasses, light-responsive lenses, blue-light-filtering lenses, non-prescription lenses, and contact lenses. It also provides accessories, such as cases, lenses kit with anti-fog spray, pouches, and anti-fog lens spray through its retail stores, website, and mobile apps. In addition, the company offers eye exams and vision tests. Warby Parker Inc. was incorporated in 2009 and is headquartered in New York, New York.