Lulu’s Fashion Lounge (NASDAQ:LVLU – Get Free Report) and Sally Beauty (NYSE:SBH – Get Free Report) are both small-cap consumer discretionary companies, but which is the better business? We will contrast the two businesses based on the strength of their dividends, analyst recommendations, earnings, institutional ownership, risk, profitability and valuation.
Volatility & Risk
Lulu’s Fashion Lounge has a beta of 0.27, indicating that its stock price is 73% less volatile than the S&P 500. Comparatively, Sally Beauty has a beta of 1.03, indicating that its stock price is 3% more volatile than the S&P 500.
Valuation & Earnings
This table compares Lulu’s Fashion Lounge and Sally Beauty”s gross revenue, earnings per share (EPS) and valuation.
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio | |
| Lulu’s Fashion Lounge | $261.95 million | 0.12 | -$13.71 million | ($2.94) | -3.74 |
| Sally Beauty | $3.73 billion | 0.45 | $195.88 million | $1.92 | 9.39 |
Sally Beauty has higher revenue and earnings than Lulu’s Fashion Lounge. Lulu’s Fashion Lounge is trading at a lower price-to-earnings ratio than Sally Beauty, indicating that it is currently the more affordable of the two stocks.
Profitability
This table compares Lulu’s Fashion Lounge and Sally Beauty’s net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets | |
| Lulu’s Fashion Lounge | -3.17% | -946.15% | -8.73% |
| Sally Beauty | 5.16% | 24.36% | 7.07% |
Analyst Ratings
This is a breakdown of current recommendations and price targets for Lulu’s Fashion Lounge and Sally Beauty, as reported by MarketBeat.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score | |
| Lulu’s Fashion Lounge | 1 | 0 | 0 | 0 | 1.00 |
| Sally Beauty | 1 | 2 | 2 | 1 | 2.50 |
Sally Beauty has a consensus target price of $17.40, indicating a potential downside of 3.53%. Given Sally Beauty’s stronger consensus rating and higher possible upside, analysts clearly believe Sally Beauty is more favorable than Lulu’s Fashion Lounge.
Institutional & Insider Ownership
73.8% of Lulu’s Fashion Lounge shares are owned by institutional investors. 7.8% of Lulu’s Fashion Lounge shares are owned by company insiders. Comparatively, 2.0% of Sally Beauty shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company will outperform the market over the long term.
Summary
Sally Beauty beats Lulu’s Fashion Lounge on 13 of the 15 factors compared between the two stocks.
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.
About Sally Beauty
Sally Beauty Holdings, Inc. operates as a specialty retailer and distributor of professional beauty supplies. The company operates through two segments, Sally Beauty Supply and Beauty Systems Group. The Sally Beauty Supply segment offers beauty products, including hair color and care products, skin and nail care products, styling tools, and other beauty products for retail customers, salons, and salon professionals. This segment also provides products under Wella and L'Oreal brands. The Beauty Systems Group segment offers professional beauty products, such as hair color and care products, skin and nail care products, styling tools, and other beauty items directly to salons and salon professionals through its professional-only stores, e-commerce platforms, and sales force, as well as through franchised stores under the Armstrong McCall store name. This segment also sells products under Paul Mitchell and Wella brands. It operates stores and franchised units in the United States, Puerto Rico, Canada, Mexico, Chile, Peru, the United Kingdom, Ireland, Belgium, France, the Netherlands, Spain, and Germany. The company distributes its products through full-service/exclusive distributors and open-line distributors. Sally Beauty Holdings, Inc. was founded in 1964 and is headquartered in Denton, Texas.
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