Contrasting FIGS (NYSE:FIGS) and Zalando (OTCMKTS:ZLNDY)

Zalando (OTCMKTS:ZLNDY) and FIGS (NYSE:FIGS) are both retail/wholesale companies, but which is the better stock? We will contrast the two companies based on the strength of their institutional ownership, earnings, dividends, profitability, analyst recommendations, valuation and risk.

Analyst Ratings

This is a summary of current recommendations for Zalando and FIGS, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Zalando	1	2	2	1	2.50
FIGS	0	6	4	1	2.55

FIGS has a consensus target price of $15.93, suggesting a potential upside of 38.23%. Given FIGS’s stronger consensus rating and higher possible upside, analysts plainly believe FIGS is more favorable than Zalando.

Earnings & Valuation

This table compares Zalando and FIGS”s revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Zalando	$13.97 billion	0.41	$243.36 million	$0.26	43.04
FIGS	$631.10 million	3.04	$34.25 million	$0.22	52.38

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

Institutional & Insider Ownership

92.2% of FIGS shares are owned by institutional investors. 29.4% of FIGS shares are owned by company 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.

Profitability

This table compares Zalando and FIGS’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Zalando	0.89%	4.12%	1.33%
FIGS	6.10%	9.69%	7.37%

Volatility & Risk

Zalando has a beta of 1.52, indicating that its share price is 52% more volatile than the S&P 500. Comparatively, FIGS has a beta of 1.12, indicating that its share price is 12% more volatile than the S&P 500.

Summary

FIGS beats Zalando on 10 of the 14 factors compared between the two stocks.

About Zalando

Zalando SE operates an online platform for fashion and lifestyle products. The company operates through Fashion Store and Offprice segments. It provides shoes, apparel, accessories, and beauty products with free delivery and returns, as well as various payment options. The company also sells its products through Lounge by Zalando; and brick-and-mortar outlet stores. It operates in Germany, Austria, Switzerland, Belgium, Croatia, the Czech Republic, Denmark, Estonia, Finland, Hungary, France, Ireland, Italy, Latvia, Lithuania, Luxembourg, the Netherlands, Norway, Poland, Romania, Slovakia, Slovenia, Spain, Sweden, and the United Kingdom. The company was founded in 2008 and is headquartered in Berlin, Germany.

About FIGS

FIGS, Inc. operates as a direct-to-consumer healthcare apparel and lifestyle company in the United States and internationally. It designs and sells healthcare apparel and scrubwear and non-scrubwear offerings, such as outerwear, underscrubs, footwear, compression socks, lab coats, loungewear, and other apparel. It also offers sports bras, performance leggings, tops, super-soft pima cotton tops, vests, fleeces, and jackets; necessities, scrub caps, lanyards, badge reels, tote bags, baseball caps, and beanies. The company markets and sells its products to healthcare professionals through its direct-to-consumer digital platform comprising website, mobile app, and B2B business, as well as retail store. FIGS, Inc. was founded in 2013 and is headquartered in Santa Monica, California. FIGS, Inc.