Financial Review: Tilly's (TLYS) & Express (EXPR)

Tilly's (NYSE: TLYS) and Express (NYSE:EXPR) are both small-cap cyclical consumer goods & services companies, but which is the better business? We will contrast the two businesses based on the strength of their institutional ownership, profitability, earnings, analyst recommendations, valuation, risk and dividends.

Profitability

This table compares Tilly's and Express’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Tilly's 5.73% 20.14% 11.91%
Express 0.60% 3.85% 2.03%

Earnings & Valuation

This table compares Tilly's and Express’ revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Tilly's $568.95 million 0.78 $11.41 million $0.49 31.45
Express $2.19 billion 0.38 $57.41 million $0.16 66.75

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

Risk and Volatility

Tilly's has a beta of -0.42, suggesting that its stock price is 142% less volatile than the S&P 500. Comparatively, Express has a beta of 1.55, suggesting that its stock price is 55% more volatile than the S&P 500.

Institutional & Insider Ownership

43.5% of Tilly's shares are held by institutional investors. Comparatively, 99.1% of Express shares are held by institutional investors. 50.1% of Tilly's shares are held by insiders. Comparatively, 2.6% of Express shares are held by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company is poised for long-term growth.

Analyst Recommendations

This is a breakdown of recent ratings and target prices for Tilly's and Express, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Tilly's 0 1 2 0 2.67
Express 0 9 0 0 2.00

Tilly's presently has a consensus price target of $14.00, suggesting a potential downside of 9.15%. Express has a consensus price target of $9.25, suggesting a potential downside of 13.39%. Given Tilly's’ stronger consensus rating and higher probable upside, research analysts clearly believe Tilly's is more favorable than Express.

Summary

Tilly's beats Express on 9 of the 14 factors compared between the two stocks.

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.

Express Company Profile

Express, Inc. is a specialty apparel and accessories retailer offering both women’s and men’s merchandise. The Company targets women and men between 20 and 30 years old. It offers an assortment of fashionable apparel and accessories to address fashion needs across multiple aspects of lifestyles, including work, casual, jeanswear and going-out occasions. It is engaged in the operation of its brick-and-mortar retail and outlet stores, e-commerce operations and franchise operations. It sells its products through its e-commerce Website, www.express.com and its mobile application, and has franchise agreements with franchisees that operate Express locations in Latin America. It operated 656 stores across the United States, in Canada and in Puerto Rico, including 104 factory outlet stores, as of January 28, 2017. Its products are created by its in-house design team. Its portfolio of apparel products includes brands, such as Portofino shirt, Editor pant and 1MX shirt.

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