Analyzing Tilly’s (NYSE:TLYS) & Lovesac (NASDAQ:LOVE)

Lovesac (NASDAQ:LOVE) and Tilly’s (NYSE:TLYS) are both small-cap consumer discretionary companies, but which is the better business? We will contrast the two businesses based on the strength of their dividends, analyst recommendations, risk, valuation, profitability, institutional ownership and earnings.

Volatility & Risk

Lovesac has a beta of 2.03, indicating that its share price is 103% more volatile than the S&P 500. Comparatively, Tilly’s has a beta of 0.13, indicating that its share price is 87% less volatile than the S&P 500.

Earnings and Valuation

This table compares Lovesac and Tilly’s”s revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Lovesac	$697.11 million	0.31	$4.07 million	$1.22	12.25
Tilly’s	$553.59 million	0.26	-$17.45 million	$0.06	79.60

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

Profitability

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

	Net Margins	Return on Equity	Return on Assets
Lovesac	2.56%	2.57%	1.02%
Tilly’s	0.34%	2.37%	0.61%

Institutional & Insider Ownership

91.3% of Lovesac shares are held by institutional investors. Comparatively, 76.4% of Tilly’s shares are held by institutional investors. 7.8% of Lovesac shares are held by company insiders. Comparatively, 26.4% of Tilly’s shares are held by company insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock will outperform the market over the long term.

Analyst Recommendations

This is a breakdown of current ratings for Lovesac and Tilly’s, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Lovesac	0	1	3	0	2.75
Tilly’s	0	2	0	1	2.67

Lovesac presently has a consensus target price of $21.33, indicating a potential upside of 42.79%. Tilly’s has a consensus target price of $5.50, indicating a potential upside of 15.16%. Given Lovesac’s stronger consensus rating and higher probable upside, equities analysts plainly believe Lovesac is more favorable than Tilly’s.

Summary

Lovesac beats Tilly’s on 12 of the 15 factors compared between the two stocks.

About Lovesac

The Lovesac Company designs, manufactures, and sells furniture. It offers sactionals, such as seats and sides; sacs, including foam beanbag chairs; and other products comprising drink holders, footsac blankets, decorative pillows, fitted seat tables, and ottomans. The company markets its products primarily through www.lovesac.com website, as well as showrooms at top tier malls, lifestyle centers, mobile concierges, kiosks, and street locations in 41 states in the United States; and in store pop-up- shops and shop-in-shops, and barter inventory transactions. The Lovesac Company was founded in 1995 and is based in Stamford, Connecticut.

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.