Contrasting Xcel Brands (XELB) and Tilly’s (TLYS)

Xcel Brands (NASDAQ: XELB) and Tilly’s (NYSE:TLYS) are both small-cap retail/wholesale companies, but which is the superior business? We will contrast the two companies based on the strength of their risk, dividends, profitability, valuation, institutional ownership, earnings and analyst recommendations.

Earnings and Valuation

This table compares Xcel Brands and Tilly’s’ gross revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	EBITDA	Earnings Per Share	Price/Earnings Ratio
Xcel Brands	$32.08 million	2.11	$4.00 million	$0.14	30.36
Tilly’s	$569.68 million	0.44	$47.93 million	$0.48	18.15

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

Insider & Institutional Ownership

23.0% of Xcel Brands shares are owned by institutional investors. Comparatively, 39.6% of Tilly’s shares are owned by institutional investors. 62.2% of Xcel Brands shares are owned by company insiders. Comparatively, 53.4% of Tilly’s shares are owned by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a company will outperform the market over the long term.

Analyst Recommendations

This is a breakdown of current recommendations and price targets for Xcel Brands and Tilly’s, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Xcel Brands	0	0	1	0	3.00
Tilly’s	0	3	3	0	2.50

Xcel Brands currently has a consensus price target of $4.50, suggesting a potential upside of 5.88%. Tilly’s has a consensus price target of $10.83, suggesting a potential upside of 24.38%. Given Tilly’s’ higher possible upside, analysts plainly believe Tilly’s is more favorable than Xcel Brands.

Profitability

This table compares Xcel Brands and Tilly’s’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Xcel Brands	8.38%	0.99%	0.70%
Tilly’s	2.46%	7.86%	4.91%

Volatility & Risk

Xcel Brands has a beta of 0.66, indicating that its stock price is 34% less volatile than the S&P 500. Comparatively, Tilly’s has a beta of -0.43, indicating that its stock price is 143% less volatile than the S&P 500.

Summary

Tilly’s beats Xcel Brands on 8 of the 14 factors compared between the two stocks.

About Xcel Brands

Xcel Brands, Inc. is a brand development and media company. The Company is engaged in the design, production, licensing, marketing, and direct to consumer sales of branded apparel, footwear, accessories, jewelry, home goods, and other consumer products, and the acquisition of consumer lifestyle brands. The Company’s brand portfolio consists of the Isaac Mizrahi, Judith Ripka, H Halston, C Wonder and Highline Collective brands. The Company also manages and designs the Liz Claiborne New York brand (LCNY Brand). Isaac Mizrahi has over 150 different product categories, including sportswear, footwear, handbags, watches, eyewear, fragrance, tech accessories, intimates, bridal gowns and accessories, pet products, home and other merchandise. The Company’s Judith Ripka is a luxury jewelry brand. Wonder brand offers women’s clothing, footwear, jewelry and accessories; housewares, and home decor and gifts. The Liz Claiborne New York includes women’s apparel, footwear, outerwear and accessories.

About Tilly’s

Tilly’s, Inc. is a destination specialty retailer of casual apparel, footwear and accessories for young men, young women, boys and girls. The Company offers an unparalleled selection of relevant brands, styles, colors, sizes and price points. The Company’s apparel merchandise includes branded, fashion and styles for tops, outerwear, bottoms and dresses. Its accessories merchandise includes backpacks, hats, sunglasses, headphones, handbags, watches, jewelry and others. The Company offers its products through stores and Website. The Company operates over 220 stores in approximately 30 states. The Company’s stores are located in malls, lifestyle centers, power centers, community centers, outlet centers and street-front locations. The Company also operates an e-commerce platform for desktop and mobile. The Company’s third-party brands include AYC, Adidas, Billabong, Converse, Hurley, Nixon, JanSport, LRG and Stance, among others.