Reviewing Tilly’s (NYSE:TLYS) & Petco Health and Wellness (NASDAQ:WOOF)

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

Profitability

This table compares Petco Health and Wellness and Tilly’s’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Petco Health and Wellness	0.51%	3.44%	0.78%
Tilly’s	0.34%	2.37%	0.61%

Analyst Recommendations

This is a breakdown of current ratings and price targets for Petco Health and Wellness and Tilly’s, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Petco Health and Wellness	2	5	1	1	2.11
Tilly’s	0	3	0	0	2.00

Petco Health and Wellness presently has a consensus price target of $3.42, indicating a potential upside of 46.78%. Tilly’s has a consensus price target of $5.50, indicating a potential upside of 18.51%. Given Petco Health and Wellness’ stronger consensus rating and higher possible upside, research analysts plainly believe Petco Health and Wellness is more favorable than Tilly’s.

Earnings and Valuation

This table compares Petco Health and Wellness and Tilly’s”s revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Petco Health and Wellness	$5.96 billion	0.13	$9.07 million	$0.10	23.30
Tilly’s	$553.59 million	0.26	-$17.45 million	$0.06	77.35

Petco Health and Wellness has higher revenue and earnings than Tilly’s. Petco Health and Wellness is trading at a lower price-to-earnings ratio than Tilly’s, indicating that it is currently the more affordable of the two stocks.

Institutional & Insider Ownership

76.4% of Tilly’s shares are owned by institutional investors. 6.5% of Petco Health and Wellness shares are owned by insiders. Comparatively, 26.4% of Tilly’s shares are owned by insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock will outperform the market over the long term.

Volatility & Risk

Petco Health and Wellness has a beta of 1.59, meaning that its stock price is 59% more volatile than the S&P 500. Comparatively, Tilly’s has a beta of 0.06, meaning that its stock price is 94% less volatile than the S&P 500.

Summary

Petco Health and Wellness beats Tilly’s on 11 of the 15 factors compared between the two stocks.

About Petco Health and Wellness

Petco Health and Wellness Company, Inc., operates as a health and wellness company, focuses on enhancing the lives of pets, pet parents, and its Petco partners in the United States, Mexico, and Puerto Rico. The company provides veterinary care, grooming, training, tele-health, and Vital Care and pet health insurance services, as well as veterinary services through Vetco mobile clinics. It also offers pet consumables, supplies, and services through its petco.com, petcoach.co, petinsurancequotes.com, and pupbox.com websites. The company offers its products under the WholeHearted, Reddy, and Well & Good brands. Petco Health and Wellness Company, Inc. was founded in 1965 and is headquartered in San Diego, California.

About Tilly’s

Tilly’s, Inc. engages in the retail of casual apparel, footwear, and accessories. Its stores are located in retail centers, including malls, lifestyle centers, power centers, community centers, outlet centers, and street-front locations. The company was founded by Hezy Shaked and Tilly Levine in 1982 and is headquartered in Irvine, CA.