Head to Head Review: Lulu’s Fashion Lounge (NASDAQ:LVLU) and Allbirds (NASDAQ:BIRD)

Lulu’s Fashion Lounge (NASDAQ:LVLU) and Allbirds (NASDAQ:BIRD) are both small-cap retail/wholesale companies, but which is the superior investment? We will compare the two businesses based on the strength of their risk, earnings, profitability, dividends, analyst recommendations, valuation and institutional ownership.

Profitability

This table compares Lulu’s Fashion Lounge and Allbirds’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Lulu’s Fashion Lounge	-3.56%	-423.50%	-9.95%
Allbirds	-53.36%	-173.54%	-67.54%

Institutional & Insider Ownership

73.8% of Lulu’s Fashion Lounge shares are owned by institutional investors. Comparatively, 44.1% of Allbirds shares are owned by institutional investors. 7.8% of Lulu’s Fashion Lounge shares are owned by insiders. Comparatively, 30.7% of Allbirds shares are owned by insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a company is poised for long-term growth.

Volatility and Risk

Lulu’s Fashion Lounge has a beta of 0.37, indicating that its stock price is 63% less volatile than the S&P 500. Comparatively, Allbirds has a beta of 2.56, indicating that its stock price is 156% more volatile than the S&P 500.

Earnings and Valuation

This table compares Lulu’s Fashion Lounge and Allbirds”s revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Lulu’s Fashion Lounge	$282.28 million	0.08	-$13.71 million	($3.50)	-2.14
Allbirds	$152.47 million	0.30	-$77.28 million	($9.12)	-0.56

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

Analyst Recommendations

This is a summary of recent ratings and price targets for Lulu’s Fashion Lounge and Allbirds, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Lulu’s Fashion Lounge	1	0	0	0	1.00
Allbirds	1	2	0	0	1.67

Allbirds has a consensus price target of $8.00, indicating a potential upside of 56.25%. Given Allbirds’ stronger consensus rating and higher possible upside, analysts clearly believe Allbirds is more favorable than Lulu’s Fashion Lounge.

Summary

Allbirds beats Lulu’s Fashion Lounge on 7 of the 13 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 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.