Critical Review: Container Store (The) (TCS) & Cabela’s (CAB)

Cabela’s (NYSE: CAB) and Container Store (The) (NYSE:TCS) are both retail/wholesale companies, but which is the better investment? We will compare the two businesses based on the strength of their risk, valuation, institutional ownership, analyst recommendations, earnings, profitability and dividends.

Analyst Recommendations

This is a summary of recent ratings and price targets for Cabela’s and Container Store (The), as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Cabela’s 0 7 1 0 2.13
Container Store (The) 1 4 1 0 2.00

Cabela’s currently has a consensus target price of $64.60, suggesting a potential upside of 20.50%. Container Store (The) has a consensus target price of $5.56, suggesting a potential upside of 24.72%. Given Container Store (The)’s higher probable upside, analysts clearly believe Container Store (The) is more favorable than Cabela’s.

Institutional & Insider Ownership

57.8% of Cabela’s shares are held by institutional investors. Comparatively, 78.7% of Container Store (The) shares are held by institutional investors. 21.0% of Cabela’s shares are held by insiders. Comparatively, 65.7% of Container Store (The) shares are held by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock will outperform the market over the long term.

Valuation & Earnings

This table compares Cabela’s and Container Store (The)’s top-line revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Cabela’s $4.06 billion 0.91 $463.18 million $1.94 27.63
Container Store (The) $825.55 million 0.26 $70.50 million $0.19 23.47

Cabela’s has higher revenue and earnings than Container Store (The). Container Store (The) is trading at a lower price-to-earnings ratio than Cabela’s, indicating that it is currently the more affordable of the two stocks.

Risk and Volatility

Cabela’s has a beta of 0.14, suggesting that its stock price is 86% less volatile than the S&P 500. Comparatively, Container Store (The) has a beta of 1.57, suggesting that its stock price is 57% more volatile than the S&P 500.

Profitability

This table compares Cabela’s and Container Store (The)’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Cabela’s 3.29% 8.60% 1.98%
Container Store (The) 1.13% 5.34% 1.49%

Summary

Cabela’s beats Container Store (The) on 9 of the 13 factors compared between the two stocks.

Cabela’s Company Profile

Cabela’s Incorporated is an omni-channel retailer of hunting, fishing, camping, shooting sports and related outdoor merchandise. The Company offers its customers a selection of national and regional brand products, including its Cabela’s brand. The Company’s segments include Merchandising and Financial Services. The Merchandising segment sells products and services through the Company’s retail stores, its e-commerce Websites (Cabelas.com and Cabelas.ca), and its catalogs. The United States merchandising and Canada merchandising operating segments have been aggregated into its Merchandising segment. The Financial Services segment issues co-branded credit cards, which are available through all of its channels. The Company’s product assortment includes merchandise and equipment for hunting, fishing, marine use, camping, and recreational sport shooting, along with casual and outdoor apparel and footwear, optics, vehicle accessories, and gifts and home furnishings with an outdoor theme.

Container Store (The) Company Profile

The Container Store Group, Inc. is a specialty retailer of storage and organization products. The Company’s segments include The Container Store (TCS), Elfa and Corporate/Other. The Company’s TCS segment consists of its retail stores, Website and call center, as well as its installation and organizational services business. The Company’s Elfa segment includes the manufacturing business that produces the elfa brand products that are sold domestically, exclusively through the TCS segment, as well as throughout Europe. Its Swedish subsidiary, Elfa International AB (Elfa), designs and manufactures component-based shelving and drawer systems and made-to-measure sliding doors. It merchandises over 11,000 products in each of its stores and online. Its stores are organized into various lifestyle departments, which include Bath, Box, Closets, Collections, Containers, Custom Closets, Food Storage, Gift Packaging, Hooks, Kitchen, Laundry, Office, Shelving, Storage, Trash and Travel.

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