Contrasting Li Ning (OTCMKTS:LNNGY) and Tilly’s (NYSE:TLYS)

Li Ning (OTCMKTS:LNNGY) and Tilly’s (NYSE:TLYS) are both retail/wholesale companies, but which is the better stock? We will contrast the two businesses based on the strength of their earnings, valuation, risk, dividends, institutional ownership, profitability and analyst recommendations.

Analyst Ratings

This is a breakdown of current recommendations and price targets for Li Ning and Tilly’s, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Li Ning	1	0	0	0	1.00
Tilly’s	1	3	0	0	1.75

Tilly’s has a consensus target price of $2.25, suggesting a potential upside of 63.52%. Given Tilly’s’ stronger consensus rating and higher probable upside, analysts clearly believe Tilly’s is more favorable than Li Ning.

Valuation and Earnings

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

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Li Ning	$3.99 billion	1.84	$419.10 million	N/A	N/A
Tilly’s	$569.45 million	0.07	-$46.23 million	($1.14)	-1.21

Li Ning has higher revenue and earnings than Tilly’s.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
Li Ning	N/A	N/A	N/A
Tilly’s	-6.24%	-39.59%	-10.17%

Institutional and Insider Ownership

76.4% of Tilly’s shares are held by institutional investors. 2.8% of Tilly’s shares are held by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company will outperform the market over the long term.

Risk and Volatility

Li Ning has a beta of 0.54, suggesting that its stock price is 46% less volatile than the S&P 500. Comparatively, Tilly’s has a beta of 1.16, suggesting that its stock price is 16% more volatile than the S&P 500.

Summary

Li Ning beats Tilly’s on 6 of the 11 factors compared between the two stocks.

About Li Ning

Li Ning Company Limited, a sports brand company, engages in the research and development, design, manufacture, marketing, distribution, and retail of sporting goods in the People’s Republic of China. The company offers sporting goods, including professional and leisure footwear, apparel, equipment, and accessories under the LI-NING brand. It also develops, manufactures, markets, distributes, and/or sells outdoor sports products under the AIGLE brand; table tennis products under the Double Happiness brand name; fashionable fitness products for dance and yoga under the Danskin brand; and badminton products under the Kason brand name. The company also provides brand licensing, administrative, and property management services. It operates conventional stores, flagship stores, China LI-NING stores, LI-NING 1990 stores, factory outlets, and multi-brand stores under the LI-NING brand. The company was founded in 1990 and is headquartered in Beijing, the People’s Republic of China.

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.