Tandy Leather Factory (NASDAQ:TLF) vs. Torrid (NYSE:CURV) Critical Analysis

Torrid (NYSE:CURV) and Tandy Leather Factory (NASDAQ:TLF) are both small-cap consumer discretionary companies, but which is the superior stock? We will contrast the two companies based on the strength of their valuation, profitability, risk, earnings, institutional ownership, analyst recommendations and dividends.

Insider & Institutional Ownership

81.8% of Torrid shares are held by institutional investors. Comparatively, 56.4% of Tandy Leather Factory shares are held by institutional investors. 6.5% of Torrid shares are held by insiders. Comparatively, 36.2% of Tandy Leather Factory shares are held by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company is poised for long-term growth.

Profitability

This table compares Torrid and Tandy Leather Factory’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Torrid	-1.28%	N/A	-3.10%
Tandy Leather Factory	-2.14%	-3.31%	-1.98%

Volatility and Risk

Torrid has a beta of 0.85, indicating that its share price is 15% less volatile than the S&P 500. Comparatively, Tandy Leather Factory has a beta of 0.47, indicating that its share price is 53% less volatile than the S&P 500.

Analyst Recommendations

This is a summary of recent ratings and target prices for Torrid and Tandy Leather Factory, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Torrid	2	5	1	0	1.88
Tandy Leather Factory	1	0	0	0	1.00

Torrid presently has a consensus price target of $1.64, indicating a potential downside of 24.33%. Given Torrid’s stronger consensus rating and higher possible upside, analysts clearly believe Torrid is more favorable than Tandy Leather Factory.

Earnings and Valuation

This table compares Torrid and Tandy Leather Factory”s gross revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Torrid	$1.00 billion	0.22	-$7.03 million	($0.12)	-18.03
Tandy Leather Factory	$76.32 million	0.28	$9.10 million	($0.17)	-15.29

Tandy Leather Factory has lower revenue, but higher earnings than Torrid. Torrid is trading at a lower price-to-earnings ratio than Tandy Leather Factory, indicating that it is currently the more affordable of the two stocks.

Summary

Torrid beats Tandy Leather Factory on 9 of the 14 factors compared between the two stocks.

About Torrid

Torrid Holdings Inc. operates in women’s plus-size apparel and intimates market in North America. The company designs, develops, and merchandises its products under the Torrid, Torrid Curve, CURV, and Lovesick brand names. It is involved in the sale of tops, bottoms, dresses, denims, activewear, intimates, sleep wear, swim wear, and outerwear products; and non-apparel products comprising accessories, footwear, and beauty products. The company sells its products directly to consumers through its e-commerce platform and its physical stores. Torrid Holdings Inc. was incorporated in 2019 and is headquartered in City Of Industry, California.

About Tandy Leather Factory

Tandy Leather Factory, Inc. engages in the distribution of leather and related products. It offers leather, leatherworking tools, buckles and adornments for belts, leather dyes and finishes, saddle and tack hardware, and do-it-yourself kits. It operates through North America and International geographical segments. The North America geographical segment consists of 115 stores, which offer a broad selection of products combined with leathercraft expertise in a one-stop shop. The International geographical segment comprises of similar to North America segment but generally located in light industrial areas. The company was founded by J. Wray Thompson, Sr. and Ronald C. Morgan in 1980 and is headquartered in Fort Worth, TX.