Children’s Place (NASDAQ:PLCE) versus FIGS (NYSE:FIGS) Critical Analysis

Children’s Place (NASDAQ:PLCE) and FIGS (NYSE:FIGS) are both small-cap retail/wholesale companies, but which is the superior investment? We will contrast the two companies based on the strength of their dividends, analyst recommendations, profitability, valuation, risk, institutional ownership and earnings.

Valuation & Earnings

This table compares Children’s Place and FIGS”s gross revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Children’s Place	$1.21 billion	0.06	-$88.26 million	($4.01)	-0.87
FIGS	$631.10 million	3.04	$34.25 million	$0.22	52.20

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

Risk & Volatility

Children’s Place has a beta of 1.9, suggesting that its stock price is 90% more volatile than the S&P 500. Comparatively, FIGS has a beta of 1.04, suggesting that its stock price is 4% more volatile than the S&P 500.

Analyst Recommendations

This is a summary of recent recommendations and price targets for Children’s Place and FIGS, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Children’s Place	1	1	0	0	1.50
FIGS	0	6	4	1	2.55

Children’s Place presently has a consensus price target of $4.00, indicating a potential upside of 14.94%. FIGS has a consensus price target of $15.93, indicating a potential upside of 38.69%. Given FIGS’s stronger consensus rating and higher probable upside, analysts clearly believe FIGS is more favorable than Children’s Place.

Insider and Institutional Ownership

92.2% of FIGS shares are held by institutional investors. 0.9% of Children’s Place shares are held by company insiders. Comparatively, 27.1% of FIGS shares are held by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock is poised for long-term growth.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
Children’s Place	-7.30%	N/A	-10.79%
FIGS	6.10%	9.69%	7.37%

Summary

FIGS beats Children’s Place on 13 of the 15 factors compared between the two stocks.

About Children’s Place

The Children’s Place, Inc. engages in the provision of apparel, footwear, accessories, and other items for children. The firm also designs contracts to manufacture and sell fashionable and value-priced merchandise under the brand names of The Children’s Place, Baby Place, and Gymboree. It operates through The Children’s Place U.S. and The Children’s Place International segments. The Children’s Place U.S. segment refers to the company’s U.S. and Puerto Rico-based stores and revenue from its U.S. based wholesale business. The Children’s Place International segment is involved in the Canadian-based stores, revenue from the company’s Canadian-based wholesale business, as well as revenue from international franchisees. The company was founded by David Pulver and Clinton A. Clark in 1969 and is headquartered in Secaucus, NJ.

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.