Francesca’s Holdings Corporation (NASDAQ: FRAN) and Tilly’s (NYSE:TLYS) are both small-cap consumer discretionary companies, but which is the superior investment? We will contrast the two companies based on the strength of their valuation, earnings, analyst recommendations, institutional ownership, risk, profitability and dividends.

Valuation and Earnings

This table compares Francesca’s Holdings Corporation and Tilly’s’ revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Francesca’s Holdings Corporation $493.21 million 0.52 $78.79 million $0.97 7.19
Tilly’s $572.08 million 0.63 $50.50 million $0.41 30.49

Francesca’s Holdings Corporation has higher revenue, but lower earnings than Tilly’s. Francesca’s Holdings Corporation is trading at a lower price-to-earnings ratio than Tilly’s, indicating that it is currently the more affordable of the two stocks.

Volatility & Risk

Francesca’s Holdings Corporation has a beta of 0.22, suggesting that its stock price is 78% less volatile than the S&P 500. Comparatively, Tilly’s has a beta of -0.45, suggesting that its stock price is 145% less volatile than the S&P 500.

Analyst Recommendations

This is a summary of current recommendations and price targets for Francesca’s Holdings Corporation and Tilly’s, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Francesca’s Holdings Corporation 0 6 2 0 2.25
Tilly’s 0 2 2 0 2.50

Francesca’s Holdings Corporation presently has a consensus target price of $13.86, suggesting a potential upside of 98.81%. Tilly’s has a consensus target price of $11.50, suggesting a potential downside of 8.00%. Given Francesca’s Holdings Corporation’s higher possible upside, analysts clearly believe Francesca’s Holdings Corporation is more favorable than Tilly’s.

Insider and Institutional Ownership

40.3% of Tilly’s shares are held by institutional investors. 1.2% of Francesca’s Holdings Corporation shares are held by insiders. Comparatively, 50.1% of Tilly’s shares are held by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock is poised for long-term growth.

Profitability

This table compares Francesca’s Holdings Corporation and Tilly’s’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Francesca’s Holdings Corporation 7.28% 31.88% 18.83%
Tilly’s 2.09% 8.85% 5.50%

Summary

Francesca’s Holdings Corporation beats Tilly’s on 7 of the 13 factors compared between the two stocks.

Francesca’s Holdings Corporation Company Profile

Francesca’s Holdings Corporation is a holding company. The Company is a specialty retailer, which operates a chain of boutiques across the United States. The Company offers a mix of apparel, jewelry, accessories and gifts. As of January 28, 2017, the Company operated 671 boutiques in 48 states and the District of Columbia, and also served its customers through www.francescas.com, its e-commerce Website. The Company offers apparel, such as dresses, fashion tops, sweaters, cardigans and wraps, bottoms, outerwear and jackets, tees and tanks, and intimates. The Company provides jewelry, such as necklaces, earrings, bracelets and rings. The Company offers accessories, such as handbags, clutches, wallets, shoes, belts, hats, scarves, sunglasses, watches and hair accessories. The Company provides gifts, such as fragrance, candles, bath and body, home accessories, books, wall art, nail polish and miscellaneous items. The Company operates its boutiques under the francesca’s brand.

Tilly’s Company Profile

Tilly’s, Inc. is a destination specialty retailer of casual apparel, footwear and accessories for young men, young women, boys and girls. The Company offers an unparalleled selection of relevant brands, styles, colors, sizes and price points. The Company’s apparel merchandise includes branded, fashion and styles for tops, outerwear, bottoms and dresses. Its accessories merchandise includes backpacks, hats, sunglasses, headphones, handbags, watches, jewelry and others. The Company offers its products through stores and Website. The Company operates over 220 stores in approximately 30 states. The Company’s stores are located in malls, lifestyle centers, power centers, community centers, outlet centers and street-front locations. The Company also operates an e-commerce platform for desktop and mobile. The Company’s third-party brands include AYC, Adidas, Billabong, Converse, Hurley, Nixon, JanSport, LRG and Stance, among others.

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