American Eagle Outfitters (NYSE:AEO – Get Free Report) and Lulu’s Fashion Lounge (NASDAQ:LVLU – Get Free Report) are both retail/wholesale companies, but which is the superior stock? We will compare the two businesses based on the strength of their risk, dividends, institutional ownership, valuation, analyst recommendations, profitability and earnings.
Analyst Recommendations
This is a summary of recent recommendations and price targets for American Eagle Outfitters and Lulu’s Fashion Lounge, as reported by MarketBeat.com.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score | |
| American Eagle Outfitters | 3 | 9 | 1 | 1 | 2.00 |
| Lulu’s Fashion Lounge | 1 | 1 | 0 | 0 | 1.50 |
American Eagle Outfitters currently has a consensus target price of $15.11, suggesting a potential downside of 25.51%. Lulu’s Fashion Lounge has a consensus target price of $15.00, suggesting a potential upside of 179.85%. Given Lulu’s Fashion Lounge’s higher possible upside, analysts plainly believe Lulu’s Fashion Lounge is more favorable than American Eagle Outfitters.
Volatility and Risk
Insider & Institutional Ownership
97.3% of American Eagle Outfitters shares are held by institutional investors. Comparatively, 73.8% of Lulu’s Fashion Lounge shares are held by institutional investors. 8.7% of American Eagle Outfitters shares are held by company insiders. Comparatively, 6.8% of Lulu’s Fashion Lounge shares are held by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company is poised for long-term growth.
Profitability
This table compares American Eagle Outfitters and Lulu’s Fashion Lounge’s net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets | |
| American Eagle Outfitters | 3.74% | 13.67% | 5.80% |
| Lulu’s Fashion Lounge | -15.83% | -251.91% | -15.75% |
Valuation & Earnings
This table compares American Eagle Outfitters and Lulu’s Fashion Lounge”s revenue, earnings per share (EPS) and valuation.
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio | |
| American Eagle Outfitters | $5.27 billion | 0.65 | $329.38 million | $1.04 | 19.50 |
| Lulu’s Fashion Lounge | $315.89 million | 0.05 | -$55.29 million | ($16.16) | -0.33 |
American Eagle Outfitters has higher revenue and earnings than Lulu’s Fashion Lounge. Lulu’s Fashion Lounge is trading at a lower price-to-earnings ratio than American Eagle Outfitters, indicating that it is currently the more affordable of the two stocks.
Summary
American Eagle Outfitters beats Lulu’s Fashion Lounge on 14 of the 15 factors compared between the two stocks.
About American Eagle Outfitters
American Eagle Outfitters, Inc. operates as a multi-brand specialty retailer in the United States and internationally. The company provides jeans, apparel and accessories, and personal care products for women and men under the American Eagle brand; and intimates, apparel, activewear, and swim collections under the Aerie and OFFLINE by Aerie brands. It also offers menswear products under the Todd Snyder New York brand; and fashion clothing and accessories under the Unsubscribed brand. The company sells its products through own and licensed retail stores; concession-based shops-within-shops; and digital channels, such as www.ae.com, www.aerie.com, www.toddsnyder.com, and www.unsubscribed.com. American Eagle Outfitters, Inc. was founded in 1977 and is headquartered in Pittsburgh, Pennsylvania.
About Lulu’s Fashion Lounge
Lulu’s Fashion Lounge Holdings, Inc. engages in providing an online website for clothing. It offers retailing of women’s clothing, shoes, and accessories. The company was founded in 1996 and is headquartered in Chico, CA.
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