Critical Comparison: Urban Outfitters (URBN) vs. Kate Spade & Co (KATE)
Urban Outfitters (NASDAQ: URBN) and Kate Spade & Co (NYSE:KATE) are both mid-cap retail/wholesale companies, but which is the superior investment? We will compare the two businesses based on the strength of their institutional ownership, dividends, risk, earnings, profitability, analyst recommendations and valuation.
Volatility & Risk
Urban Outfitters has a beta of 0.73, suggesting that its share price is 27% less volatile than the S&P 500. Comparatively, Kate Spade & Co has a beta of 1.75, suggesting that its share price is 75% more volatile than the S&P 500.
This table compares Urban Outfitters and Kate Spade & Co’s top-line revenue, earnings per share and valuation.
|Gross Revenue||Price/Sales Ratio||Net Income||Earnings Per Share||Price/Earnings Ratio|
|Urban Outfitters||$3.55 billion||1.00||$218.12 million||$1.50||21.80|
|Kate Spade & Co||N/A||N/A||N/A||$1.10||16.81|
Urban Outfitters has higher revenue and earnings than Kate Spade & Co. Kate Spade & Co is trading at a lower price-to-earnings ratio than Urban Outfitters, indicating that it is currently the more affordable of the two stocks.
This is a breakdown of current recommendations for Urban Outfitters and Kate Spade & Co, as provided by MarketBeat.com.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|Kate Spade & Co||1||13||1||0||2.00|
Urban Outfitters currently has a consensus target price of $24.59, indicating a potential downside of 24.79%. Kate Spade & Co has a consensus target price of $20.04, indicating a potential upside of 8.39%. Given Kate Spade & Co’s higher probable upside, analysts plainly believe Kate Spade & Co is more favorable than Urban Outfitters.
Insider and Institutional Ownership
86.5% of Urban Outfitters shares are held by institutional investors. Comparatively, 97.9% of Kate Spade & Co shares are held by institutional investors. 26.3% of Urban Outfitters shares are held by insiders. Comparatively, 0.8% of Kate Spade & Co shares are held by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock will outperform the market over the long term.
This table compares Urban Outfitters and Kate Spade & Co’s net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
|Kate Spade & Co||0.44%||1.11%||0.43%|
Urban Outfitters beats Kate Spade & Co on 8 of the 11 factors compared between the two stocks.
About Urban Outfitters
Urban Outfitters, Inc. is a lifestyle specialty retail company. The Company operates through two segments: Retail and Wholesale. The Company’s Retail segment consists of its Urban Outfitters, Anthropologie, Free People, Terrain and Bhldn brands, whose merchandise is sold to its customers through retail stores, Websites, mobile applications, catalogs and customer contact centers. The Retail segment also includes Vetri Family, which operates restaurants under the names Amis, Alla Spina, Lo Spiedo, Pizzeria Vetri and Osteria. Its Wholesale segment consists of the Free People wholesale division that primarily designs, develops and markets young women’s contemporary casual apparel and shoes through individual and chain specialty stores and department stores. The Company’s Wholesale segment includes Free People-branded tops, bottoms, sweaters, dresses, intimates, shoes and activewear, which are sold through department and specialty stores around the world, and its Free People stores.
About Kate Spade & Co
Kate Spade & Company is engaged in the design and marketing of a range of accessories and apparel. It operates through three segments. The KATE SPADE North America segment consists of the Company’s kate spade new york and JACK SPADE brands in North America. The KATE SPADE International segment consists of the Company’s kate spade new york and JACK SPADE brands in international markets, which operates principally in Japan, Asia (excluding Japan), Europe and Latin America). The Adelington Design Group segment primarily consists of exclusive arrangements to supply jewelry for the LIZ CLAIBORNE and MONET brands. In addition, the Adelington Design Group segment serves J.C. Penney Corporation, Inc. (JCPenney) through exclusive supplier agreements for the LIZ CLAIBORNE and MONET jewelry lines. As of December 31, 2016, it operated 98 the United States Specialty Retail Stores; 35 Foreign Specialty Retail Stores; 65 the United States Outlet Stores; 17 Foreign Outlet Stores, and 54 Concessions.
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