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

Insider and Institutional Ownership

17.3% of Xcel Brands shares are owned by institutional investors. 59.9% of Xcel Brands shares are owned by insiders. Comparatively, 1.2% of Francesca’s Holdings Corporation shares are owned by insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock will outperform the market over the long term.

Profitability

This table compares Xcel Brands and Francesca’s Holdings Corporation’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%
Francesca’s Holdings Corporation 7.28% 31.88% 18.83%

Valuation and Earnings

This table compares Xcel Brands and Francesca’s Holdings Corporation’s gross revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio NetIncome Earnings Per Share Price/Earnings Ratio
Xcel Brands $32.75 million 1.58 $2.73 million $0.14 20.00
Francesca’s Holdings Corporation $487.19 million 0.49 $42.00 million $0.97 6.73

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

Risk & Volatility

Xcel Brands has a beta of 0.61, suggesting that its stock price is 39% less volatile than the S&P 500. Comparatively, Francesca’s Holdings Corporation has a beta of 0.18, suggesting that its stock price is 82% less volatile than the S&P 500.

Analyst Ratings

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

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Xcel Brands 0 0 1 0 3.00
Francesca’s Holdings Corporation 0 6 2 0 2.25

Xcel Brands currently has a consensus price target of $4.50, suggesting a potential upside of 60.71%. Francesca’s Holdings Corporation has a consensus price target of $13.86, suggesting a potential upside of 112.21%. Given Francesca’s Holdings Corporation’s higher probable upside, analysts clearly believe Francesca’s Holdings Corporation is more favorable than Xcel Brands.

Xcel Brands Company Profile

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.

Francesca’s Holdings Corporation Company Profile

Francesca’s Holdings Corporation is a holding company. The Company is a specialty retailer, which operates a chain of boutiques across the United States. The Company offers a mix of apparel, jewelry, accessories and gifts. As of January 28, 2017, the Company operated 671 boutiques in 48 states and the District of Columbia, and also served its customers through www.francescas.com, its e-commerce Website. The Company offers apparel, such as dresses, fashion tops, sweaters, cardigans and wraps, bottoms, outerwear and jackets, tees and tanks, and intimates. The Company provides jewelry, such as necklaces, earrings, bracelets and rings. The Company offers accessories, such as handbags, clutches, wallets, shoes, belts, hats, scarves, sunglasses, watches and hair accessories. The Company provides gifts, such as fragrance, candles, bath and body, home accessories, books, wall art, nail polish and miscellaneous items. The Company operates its boutiques under the francesca’s brand.

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