Financial Comparison: Tandy Leather Factory (NASDAQ:TLF) vs. Build-A-Bear Workshop (NYSE:BBW)

Tandy Leather Factory (NASDAQ:TLF) and Build-A-Bear Workshop (NYSE:BBW) are both small-cap consumer discretionary companies, but which is the better business? We will contrast the two companies based on the strength of their analyst recommendations, earnings, institutional ownership, risk, dividends, valuation and profitability.

Institutional & Insider Ownership

56.4% of Tandy Leather Factory shares are owned by institutional investors. Comparatively, 79.3% of Build-A-Bear Workshop shares are owned by institutional investors. 36.2% of Tandy Leather Factory shares are owned by insiders. Comparatively, 4.0% of Build-A-Bear Workshop shares are owned by insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock will outperform the market over the long term.

Valuation and Earnings

This table compares Tandy Leather Factory and Build-A-Bear Workshop”s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Tandy Leather Factory	$76.32 million	0.28	$9.10 million	($0.17)	-15.41
Build-A-Bear Workshop	$529.83 million	0.70	$52.20 million	$4.03	7.30

Build-A-Bear Workshop has higher revenue and earnings than Tandy Leather Factory. Tandy Leather Factory is trading at a lower price-to-earnings ratio than Build-A-Bear Workshop, indicating that it is currently the more affordable of the two stocks.

Analyst Ratings

This is a summary of recent ratings and target prices for Tandy Leather Factory and Build-A-Bear Workshop, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Tandy Leather Factory	1	0	0	0	1.00
Build-A-Bear Workshop	1	1	2	0	2.25

Build-A-Bear Workshop has a consensus price target of $53.50, indicating a potential upside of 81.97%. Given Build-A-Bear Workshop’s stronger consensus rating and higher probable upside, analysts clearly believe Build-A-Bear Workshop is more favorable than Tandy Leather Factory.

Profitability

This table compares Tandy Leather Factory and Build-A-Bear Workshop’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Tandy Leather Factory	-2.14%	-3.31%	-1.98%
Build-A-Bear Workshop	9.96%	29.85%	13.52%

Risk and Volatility

Tandy Leather Factory has a beta of 0.5, meaning that its share price is 50% less volatile than the S&P 500. Comparatively, Build-A-Bear Workshop has a beta of 1.05, meaning that its share price is 5% more volatile than the S&P 500.

Summary

Build-A-Bear Workshop beats Tandy Leather Factory on 13 of the 14 factors compared between the two stocks.

About Tandy Leather Factory

Tandy Leather Factory, Inc. engages in the distribution of leather and related products. It offers leather, leatherworking tools, buckles and adornments for belts, leather dyes and finishes, saddle and tack hardware, and do-it-yourself kits. It operates through North America and International geographical segments. The North America geographical segment consists of 115 stores, which offer a broad selection of products combined with leathercraft expertise in a one-stop shop. The International geographical segment comprises of similar to North America segment but generally located in light industrial areas. The company was founded by J. Wray Thompson, Sr. and Ronald C. Morgan in 1980 and is headquartered in Fort Worth, TX.

About Build-A-Bear Workshop

Build-A-Bear Workshop, Inc. operates as a multi-channel retailer of plush animals and related products in the United States, Canada, the United Kingdom, Ireland, and internationally. The company operates through three segments: Direct-to-Consumer, Commercial, and International Franchising. Its merchandise comprises various styles of plush products to be stuffed, pre-stuffed plush products, and sounds and scents that can be added to the stuffed animals, as well as range of clothing, shoes and accessories, and other toy and novelty items, including family sleepwear. The company operates its stores under the Build-A-Bear Workshop brand name; and sells its products through its e-commerce sites and third-party marketplace sites. Build-A-Bear Workshop, Inc. was founded in 1997 and is headquartered in Saint Louis, Missouri.