Head to Head Review: Lulu’s Fashion Lounge (NASDAQ:LVLU) vs. Fossil Group (NASDAQ:FOSL)

Lulu’s Fashion Lounge (NASDAQ:LVLU) and Fossil Group (NASDAQ:FOSL) are both small-cap retail/wholesale companies, but which is the better stock? We will compare the two companies based on the strength of their earnings, risk, institutional ownership, profitability, dividends, analyst recommendations and valuation.

Profitability

This table compares Lulu’s Fashion Lounge and Fossil Group’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Lulu’s Fashion Lounge	-4.86%	-308.76%	-12.91%
Fossil Group	-7.81%	-46.78%	-7.42%

Valuation & Earnings

This table compares Lulu’s Fashion Lounge and Fossil Group”s gross revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Lulu’s Fashion Lounge	$282.28 million	0.09	-$55.29 million	($4.91)	-1.90
Fossil Group	$1.00 billion	0.28	-$78.30 million	($1.46)	-3.29

Lulu’s Fashion Lounge has higher earnings, but lower revenue than Fossil Group. Fossil Group is trading at a lower price-to-earnings ratio than Lulu’s Fashion Lounge, indicating that it is currently the more affordable of the two stocks.

Institutional and Insider Ownership

73.8% of Lulu’s Fashion Lounge shares are held by institutional investors. Comparatively, 61.1% of Fossil Group shares are held by institutional investors. 6.8% of Lulu’s Fashion Lounge shares are held by company insiders. Comparatively, 2.9% of Fossil Group shares are held by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a company is poised for long-term growth.

Risk & Volatility

Lulu’s Fashion Lounge has a beta of 0.59, meaning that its share price is 41% less volatile than the S&P 500. Comparatively, Fossil Group has a beta of 1.74, meaning that its share price is 74% more volatile than the S&P 500.

Analyst Recommendations

This is a breakdown of current ratings and recommmendations for Lulu’s Fashion Lounge and Fossil Group, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Lulu’s Fashion Lounge	1	0	0	0	1.00
Fossil Group	1	1	2	0	2.25

Fossil Group has a consensus price target of $7.00, suggesting a potential upside of 45.83%. Given Fossil Group’s stronger consensus rating and higher probable upside, analysts plainly believe Fossil Group is more favorable than Lulu’s Fashion Lounge.

Summary

Fossil Group beats Lulu’s Fashion Lounge on 9 of the 14 factors compared between the two stocks.

About Lulu’s Fashion Lounge

Lulu’s Fashion Lounge Holdings, Inc. engages in providing an online website for clothing. It offers retailing of women’s clothing, shoes, and accessories. The company was founded in 1996 and is headquartered in Chico, CA.

About Fossil Group

Fossil Group, Inc., together with its subsidiaries, designs, develops, markets, and distributes consumer fashion accessories in the United States, Europe, Asia, and internationally. The company’s products include traditional watches, smartwatches, jewelry, handbags, small leather goods, belts, and sunglasses. It also manufactures and distributes private label brands, as well as branded products purchased for resell in other branded retail stores. The company offers its products under its proprietary brands, such as FOSSIL, SKAGEN, MICHELE, RELIC, and ZODIAC; and under the licensed brands, including ARMANI EXCHANGE, DIESEL, DKNY, EMPORIO ARMANI, KATE SPADE NEW YORK, MICHAEL KORS, TORY BURCH, and Skechers. The company sells its products through company-owned retail and outlet stores, department and specialty retail stores, mass market stores, e-commerce sites, licensed and franchised FOSSIL retail stores, and retail concessions, as well as sells its products on airlines. The company was formerly known as Fossil, Inc. and changed its name to Fossil Group, Inc. in May 2013. Fossil Group, Inc. was founded in 1984 and is headquartered in Richardson, Texas.