Critical Review: FIGS (NYSE:FIGS) and Urban Outfitters (NASDAQ:URBN)

FIGS (NYSE:FIGS) and Urban Outfitters (NASDAQ:URBN) are both mid-cap consumer discretionary companies, but which is the better investment? We will contrast the two businesses based on the strength of their valuation, risk, institutional ownership, dividends, earnings, analyst recommendations and profitability.

Earnings & Valuation

This table compares FIGS and Urban Outfitters”s top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
FIGS	$631.10 million	3.68	$34.25 million	$0.33	42.41
Urban Outfitters	$6.17 billion	1.07	$464.92 million	$6.41	12.01

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

Volatility & Risk

FIGS has a beta of 1.07, indicating that its share price is 7% more volatile than the S&P 500. Comparatively, Urban Outfitters has a beta of 1.26, indicating that its share price is 26% more volatile than the S&P 500.

Analyst Recommendations

This is a breakdown of recent recommendations and price targets for FIGS and Urban Outfitters, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
FIGS	0	5	6	0	2.55
Urban Outfitters	0	7	8	0	2.53

FIGS presently has a consensus price target of $18.71, suggesting a potential upside of 33.72%. Urban Outfitters has a consensus price target of $89.75, suggesting a potential upside of 16.54%. Given FIGS’s stronger consensus rating and higher probable upside, equities research analysts plainly believe FIGS is more favorable than Urban Outfitters.

Profitability

This table compares FIGS and Urban Outfitters’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
FIGS	8.72%	12.53%	9.52%
Urban Outfitters	8.79%	18.64%	10.34%

Insider and Institutional Ownership

92.2% of FIGS shares are held by institutional investors. Comparatively, 77.6% of Urban Outfitters shares are held by institutional investors. 27.1% of FIGS shares are held by company insiders. Comparatively, 32.1% of Urban Outfitters shares are held by company insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock will outperform the market over the long term.

Summary

Urban Outfitters beats FIGS on 9 of the 14 factors compared between the two stocks.

About FIGS

FIGS, Inc. operates as a direct-to-consumer healthcare apparel and lifestyle company in the United States and internationally. It designs and sells healthcare apparel and scrubwear and non-scrubwear offerings, such as outerwear, underscrubs, footwear, compression socks, lab coats, loungewear, and other apparel. It also offers sports bras, performance leggings, tops, super-soft pima cotton tops, vests, fleeces, and jackets; necessities, scrub caps, lanyards, badge reels, tote bags, baseball caps, and beanies. The company markets and sells its products to healthcare professionals through its direct-to-consumer digital platform comprising website, mobile app, and B2B business, as well as retail store. FIGS, Inc. was founded in 2013 and is headquartered in Santa Monica, California. FIGS, Inc.

About Urban Outfitters

Urban Outfitters, Inc. engages in the retail and wholesale of general consumer products. The company operates through three segments: Retail, Wholesale, and Nuuly. It operates Urban Outfitters stores, which offer women's and men's fashion apparel, activewear, intimates, footwear, accessories, home goods, electronics, and beauty products for young adults aged 18 to 28; and Anthropologie stores that provide women's apparel, accessories, intimates, shoes, and home furnishings, as well as gifts, decorative items, and beauty and wellness products for women aged 28 to 45. The company also operates Terrain stores that provide lifestyle home products, garden and outdoor living products, antiques, live plants, flowers, wellness products, and accessories. In addition, it operates Free People retail stores, which offer casual women's apparel, intimates, activewear, shoes, accessories, home products, gifts, and beauty and wellness products for young women aged 25 to 30; and restaurants, as well as women's apparel subscription rental service under the Nuuly brand. Further, the company is involved in the wholesale of young women's contemporary casual apparel, intimates, activewear, and shoes under the Free People brand; and apparel collections under the Urban Outfitters brand. The company serves its customers directly through retail stores, websites, mobile applications, catalogs and customer contact centers, franchisee-owned stores, and department and specialty stores, as well as social media and third-party digital platforms. Urban Outfitters, Inc. was founded in 1970 and is based in Philadelphia, Pennsylvania.