Critical Review: FIGS (NYSE:FIGS) versus Citi Trends (NASDAQ:CTRN)

FIGS (NYSE:FIGS) and Citi Trends (NASDAQ:CTRN) are both retail/wholesale companies, but which is the better stock? We will contrast the two businesses based on the strength of their profitability, analyst recommendations, institutional ownership, earnings, risk, dividends and valuation.

Valuation and Earnings

This table compares FIGS and Citi Trends”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	3.86	$34.25 million	$0.19	77.02
Citi Trends	$819.96 million	0.45	$5.21 million	$0.59	75.24

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

Volatility and Risk

FIGS has a beta of 1.2, suggesting that its share price is 20% more volatile than the S&P 500. Comparatively, Citi Trends has a beta of 2.04, suggesting that its share price is 104% more volatile than the S&P 500.

Institutional and Insider Ownership

92.2% of FIGS shares are held by institutional investors. 29.4% of FIGS shares are held by company insiders. Comparatively, 10.7% of Citi Trends shares are held by company insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a company will outperform the market over the long term.

Analyst Recommendations

This is a breakdown of recent ratings and target prices for FIGS and Citi Trends, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
FIGS	0	5	4	2	2.73
Citi Trends	1	0	2	0	2.33

FIGS currently has a consensus target price of $13.93, indicating a potential downside of 4.81%. Citi Trends has a consensus target price of $68.00, indicating a potential upside of 53.19%. Given Citi Trends’ higher probable upside, analysts clearly believe Citi Trends is more favorable than FIGS.

Profitability

This table compares FIGS and Citi Trends’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
FIGS	5.43%	8.41%	6.33%
Citi Trends	0.64%	-4.85%	-1.18%

Summary

FIGS beats Citi Trends on 11 of the 15 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 Citi Trends

Citi Trends, Inc. operates as a value retailer of fashion apparel, accessories, and home goods. The company offers apparel, such as fashion sportswear and footwear for men and ladies, as well as apparel for kids, including newborns, infants, toddlers, boys, and girls; sleepwear, lingerie, and scrubs for ladies; and kids uniforms and accessories. It also provides accessories and beauty products that include handbags, luggage, hats, belts, sunglasses, jewelry, and watches, as well as offers outerwear for men and women. In addition, the company offers home and lifestyle products comprising home products for the bedroom, bathroom, kitchen, and decorative accessories; and food, tech, team sports, health and products, as well as seasonal items, books, and toys. Citi Trends, Inc. provides its products primarily to African American and multicultural families in the United States. The company was formerly known as Allied Fashion, Inc. and changed its name to Citi Trends, Inc. in 2001. Citi Trends, Inc. was founded in 1946 and is headquartered in Savannah, Georgia.