Financial Analysis: Allbirds (NASDAQ:BIRD) & Urban Outfitters (NASDAQ:URBN)

Urban Outfitters (NASDAQ:URBN) and Allbirds (NASDAQ:BIRD) are both retail/wholesale companies, but which is the better investment? We will contrast the two companies based on the strength of their earnings, valuation, profitability, institutional ownership, analyst recommendations, dividends and risk.

Analyst Recommendations

This is a summary of current ratings for Urban Outfitters and Allbirds, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Urban Outfitters	1	8	8	1	2.50
Allbirds	1	1	1	0	2.00

Urban Outfitters currently has a consensus target price of $86.50, indicating a potential upside of 6.06%. Allbirds has a consensus target price of $11.00, indicating a potential upside of 151.72%. Given Allbirds’ higher possible upside, analysts plainly believe Allbirds is more favorable than Urban Outfitters.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
Urban Outfitters	8.15%	18.33%	10.04%
Allbirds	-51.90%	-108.35%	-56.25%

Valuation & Earnings

This table compares Urban Outfitters and Allbirds”s revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Urban Outfitters	$5.55 billion	1.32	$402.46 million	$5.30	15.39
Allbirds	$189.76 million	0.19	-$93.32 million	($10.37)	-0.42

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

Insider & Institutional Ownership

77.6% of Urban Outfitters shares are owned by institutional investors. Comparatively, 44.1% of Allbirds shares are owned by institutional investors. 31.6% of Urban Outfitters shares are owned by insiders. Comparatively, 30.7% of Allbirds shares are owned by insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company will outperform the market over the long term.

Volatility and Risk

Urban Outfitters has a beta of 1.23, meaning that its stock price is 23% more volatile than the S&P 500. Comparatively, Allbirds has a beta of 1.96, meaning that its stock price is 96% more volatile than the S&P 500.

Summary

Urban Outfitters beats Allbirds on 13 of the 15 factors compared between the two stocks.

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.

About Allbirds

Allbirds, Inc. manufactures and sells footwear and apparel products for men and women in the United States and internationally. The company offers a range of lifestyle and performance shoes; and apparel, including classic tees and sweats, socks, and underwear. It sells its products through its retail stores, as well as online. The company was formerly known as Bozz, Inc. and changed its name to Allbirds, Inc. in December 2015. Allbirds, Inc. was incorporated in 2015 and is headquartered in San Francisco, California.