Comparing Citi Trends (NASDAQ:CTRN) & Stitch Fix (NASDAQ:SFIX)

Stitch Fix (NASDAQ:SFIX) and Citi Trends (NASDAQ:CTRN) are both small-cap consumer discretionary companies, but which is the better investment? We will contrast the two companies based on the strength of their dividends, institutional ownership, earnings, analyst recommendations, valuation, profitability and risk.

Risk & Volatility

Stitch Fix has a beta of 2.45, indicating that its share price is 145% more volatile than the S&P 500. Comparatively, Citi Trends has a beta of 1.85, indicating that its share price is 85% more volatile than the S&P 500.

Earnings & Valuation

This table compares Stitch Fix and Citi Trends”s top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Stitch Fix	$1.35 billion	0.29	-$12.61 million	($0.10)	-29.30
Citi Trends	$819.96 million	0.47	$5.21 million	$0.82	56.71

Citi Trends has lower revenue, but higher earnings than Stitch Fix. Stitch Fix is trading at a lower price-to-earnings ratio than Citi Trends, indicating that it is currently the more affordable of the two stocks.

Institutional and Insider Ownership

71.0% of Stitch Fix shares are held by institutional investors. 18.4% of Stitch Fix shares are held by insiders. Comparatively, 9.6% of Citi Trends shares are held by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company is poised for long-term growth.

Analyst Ratings

This is a summary of recent ratings and target prices for Stitch Fix and Citi Trends, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Stitch Fix	1	6	1	0	2.00
Citi Trends	1	0	2	0	2.33

Stitch Fix currently has a consensus price target of $3.40, indicating a potential upside of 16.04%. Citi Trends has a consensus price target of $81.00, indicating a potential upside of 74.19%. Given Citi Trends’ stronger consensus rating and higher possible upside, analysts clearly believe Citi Trends is more favorable than Stitch Fix.

Profitability

This table compares Stitch Fix and Citi Trends’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Stitch Fix	-0.94%	-5.75%	-2.30%
Citi Trends	0.84%	8.11%	2.00%

Summary

Citi Trends beats Stitch Fix on 9 of the 13 factors compared between the two stocks.

About Stitch Fix

Stitch Fix, Inc. sells a range of apparel, shoes, and accessories for men, women, and kids through its website and mobile application in the United States and the United Kingdom. It offers denim, dresses, blouses, skirts, shoes, jewelry, and handbags under the Stitch Fix brand. The company was formerly known as rack habit inc. and changed its name to Stitch Fix, Inc. in October 2011. Stitch Fix, Inc. was incorporated in 2011 and is headquartered in San Francisco, California.

About Citi Trends

Citi Trends, Inc. operates as a value retailer of fashion apparel, accessories, and home goods. The company offers apparel, such as fashion sportswear and footwear for men and ladies, as well as apparel for kids, including newborns, infants, toddlers, boys, and girls; sleepwear, lingerie, and scrubs for ladies; and kids uniforms and accessories. It also provides accessories and beauty products that include handbags, luggage, hats, belts, sunglasses, jewelry, and watches, as well as offers outerwear for men and women. In addition, the company offers home and lifestyle products comprising home products for the bedroom, bathroom, kitchen, and decorative accessories; and food, tech, team sports, health and products, as well as seasonal items, books, and toys. Citi Trends, Inc. provides its products primarily to African American and multicultural families in the United States. The company was formerly known as Allied Fashion, Inc. and changed its name to Citi Trends, Inc. in 2001. Citi Trends, Inc. was founded in 1946 and is headquartered in Savannah, Georgia.