Analyzing Stitch Fix (NASDAQ:SFIX) & Genesco (NYSE:GCO)

Stitch Fix (NASDAQ:SFIX) and Genesco (NYSE:GCO) are both small-cap retail/wholesale companies, but which is the superior investment? We will contrast the two companies based on the strength of their profitability, analyst recommendations, dividends, risk, valuation, earnings and institutional ownership.

Analyst Recommendations

This is a summary of current recommendations and price targets for Stitch Fix and Genesco, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Stitch Fix	1	4	1	0	2.00
Genesco	1	3	0	1	2.20

Stitch Fix currently has a consensus price target of $6.00, indicating a potential upside of 25.00%. Genesco has a consensus price target of $36.00, indicating a potential upside of 24.79%. Given Stitch Fix’s higher probable upside, research analysts clearly believe Stitch Fix is more favorable than Genesco.

Profitability

This table compares Stitch Fix and Genesco’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Stitch Fix	-2.23%	-14.38%	-5.88%
Genesco	N/A	2.11%	0.78%

Earnings & Valuation

This table compares Stitch Fix and Genesco”s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Stitch Fix	$1.27 billion	0.51	-$28.74 million	($0.16)	-30.00
Genesco	$2.33 billion	0.13	-$18.89 million	($0.18)	-160.27

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

Insider and Institutional Ownership

71.0% of Stitch Fix shares are owned by institutional investors. Comparatively, 94.5% of Genesco shares are owned by institutional investors. 16.1% of Stitch Fix shares are owned by company insiders. Comparatively, 23.1% of Genesco shares are owned by company insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company is poised for long-term growth.

Volatility and Risk

Stitch Fix has a beta of 2.1, suggesting that its share price is 110% more volatile than the S&P 500. Comparatively, Genesco has a beta of 1.81, suggesting that its share price is 81% more volatile than the S&P 500.

Summary

Genesco beats Stitch Fix on 9 of the 15 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 Genesco

Genesco Inc. operates as a retailer and wholesaler of footwear, apparel, and accessories in the United States, Puerto Rico, Canada, the United Kingdom, and the Republic of Ireland. The company operates through four segments: Journeys Group, Schuh Group, Johnston & Murphy Group, and Genesco Brands. The Journeys Group segment offers footwear and accessories through the Journeys, Journeys Kidz, and Little Burgundy retail chains, as well as through e-commerce and catalogs for young men, women, and children. Its Schuh Group segment operates Schuh retail footwear stores that offer casual and athletic footwear, as well as sells footwear through e-commerce. The Johnston & Murphy Group segment involved in the retail and e-commerce operations; and wholesale distribution of men’s dress and casual footwear, apparel, and accessories, as well as women’s footwear and accessories. Its Genesco Brands Group segment markets footwear under the Levi’s, Dockers, and G.H. Bass brands for men, women, and children, as well as designs and manufactures the STARTER brands footwear. The company operates through Journeys, Journeys Kidz, Schuh, Little Burgundy, and Johnston & Murphy brand names; and e-commerce websites, including journeys.com, journeyskidz.com, journeys.ca, schuh.co.uk, schuh.ie, schuh.eu, johnstonmurphy.com, littleburgundyshoes.com, johnstonmurphy.ca, nashvilleshoewarehouse.com, and dockersshoes.com. Genesco Inc. was incorporated in 1934 and is headquartered in Nashville, Tennessee.