Tilly’s (NYSE:TLYS) versus Li Ning (OTCMKTS:LNNGY) Critical Analysis

Li Ning (OTCMKTS:LNNGY) and Tilly’s (NYSE:TLYS) are both retail/wholesale companies, but which is the superior business? We will contrast the two companies based on the strength of their dividends, institutional ownership, valuation, earnings, analyst recommendations, risk and profitability.

Profitability

This table compares Li Ning and Tilly’s’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Li Ning	N/A	N/A	N/A
Tilly’s	-6.24%	-39.59%	-10.17%

Valuation and Earnings

This table compares Li Ning and Tilly’s”s revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Li Ning	$3.99 billion	1.89	$419.10 million	N/A	N/A
Tilly’s	$569.45 million	0.07	-$46.23 million	($1.14)	-1.20

Li Ning has higher revenue and earnings than Tilly’s.

Volatility and Risk

Li Ning has a beta of 0.54, meaning that its share price is 46% less volatile than the S&P 500. Comparatively, Tilly’s has a beta of 1.16, meaning that its share price is 16% more volatile than the S&P 500.

Analyst Ratings

This is a summary of recent recommendations for Li Ning and Tilly’s, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Li Ning	1	0	0	0	1.00
Tilly’s	1	3	0	0	1.75

Tilly’s has a consensus target price of $2.25, suggesting a potential upside of 65.08%. Given Tilly’s’ stronger consensus rating and higher probable upside, analysts plainly believe Tilly’s is more favorable than Li Ning.

Insider and Institutional Ownership

76.4% of Tilly’s shares are owned by institutional investors. 2.8% of Tilly’s shares are owned by insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company is poised for long-term growth.

Summary

Li Ning beats Tilly’s on 6 of the 11 factors compared between the two stocks.

About Li Ning

Li Ning Company Limited, a sports brand company, engages in the research and development, design, manufacture, marketing, distribution, and retail of sporting goods in the People’s Republic of China. The company offers sporting goods, including professional and leisure footwear, apparel, equipment, and accessories under the LI-NING brand. It also develops, manufactures, markets, distributes, and/or sells outdoor sports products under the AIGLE brand; table tennis products under the Double Happiness brand name; fashionable fitness products for dance and yoga under the Danskin brand; and badminton products under the Kason brand name. The company also provides brand licensing, administrative, and property management services. It operates conventional stores, flagship stores, China LI-NING stores, LI-NING 1990 stores, factory outlets, and multi-brand stores under the LI-NING brand. The company was founded in 1990 and is headquartered in Beijing, the People’s Republic of China.

About Tilly’s

Tilly’s, Inc. engages in the retail of casual apparel, footwear, and accessories. Its stores are located in retail centers, including malls, lifestyle centers, power centers, community centers, outlet centers, and street-front locations. The company was founded by Hezy Shaked and Tilly Levine in 1982 and is headquartered in Irvine, CA.