Vera Bradley (NASDAQ:VRA) and Torrid (NYSE:CURV) Critical Analysis

Torrid (NYSE:CURV) and Vera Bradley (NASDAQ:VRA) are both small-cap retail/wholesale companies, but which is the superior business? We will compare the two businesses based on the strength of their institutional ownership, profitability, dividends, valuation, analyst recommendations, risk and earnings.

Profitability

This table compares Torrid and Vera Bradley’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%
Vera Bradley	-7.02%	-6.66%	-3.65%

Institutional and Insider Ownership

81.8% of Torrid shares are held by institutional investors. Comparatively, 59.9% of Vera Bradley shares are held by institutional investors. 9.8% of Torrid shares are held by insiders. Comparatively, 14.3% of Vera Bradley shares are held by insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock is poised for long-term growth.

Valuation and Earnings

This table compares Torrid and Vera Bradley”s revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Torrid	$1.00 billion	0.20	-$7.03 million	($0.12)	-16.92
Vera Bradley	$269.65 million	0.41	-$47.84 million	($0.69)	-5.57

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

Analyst Recommendations

This is a summary of recent recommendations and price targets for Torrid and Vera Bradley, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Torrid	2	5	1	0	1.88
Vera Bradley	1	2	0	0	1.67

Torrid presently has a consensus price target of $1.64, suggesting a potential downside of 19.33%. Given Torrid’s stronger consensus rating and higher probable upside, equities analysts clearly believe Torrid is more favorable than Vera Bradley.

Risk and Volatility

Torrid has a beta of 0.89, meaning that its stock price is 11% less volatile than the S&P 500. Comparatively, Vera Bradley has a beta of 1.57, meaning that its stock price is 57% more volatile than the S&P 500.

Summary

Torrid beats Vera Bradley on 10 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 Vera Bradley

Vera Bradley, Inc., together with its subsidiaries, designs, manufactures, and sells women’s handbags, luggage and travel items, fashion and home accessories, and gifts. It operates through three segments: Vera Bradley Direct, Vera Bradley Indirect, and Pura Vida. The company offers bag products, such as totes, crossbodies, satchels, clutches, backpacks, baby bags, and lunch bags; accessories, including ID holders, lanyards, wallets, wristlets, eyewear, scarves, hair accessories, and various technology accessories; bracelets, rings, and necklaces under Pura Vida brand name; and travel products consist of rolling luggage, cosmetics, and travel and packing accessories, as well as travel bags comprising duffel and weekend bags. It also provides home products that include throw blankets, beach towels, and comforters, as well as items, such as mugs and tumblers; apparel/footwear comprising sleepwear, footwear, outerwear, tees and hoodies, and socks; and stationery and merchandising products, as well as freight, licensing, and gift card breakage services. The company sells its Vera Bradley branded products through its full-line and outlet stores in the United States; verabradley.com, an online outlet site; its annual outlet sale in Fort Wayne, Indiana. It sells its Pura Vida branded products through wholesale retailers and Pura Vida websites, including www.puravidabracelets.com, www.puravidabracelets.eu, and www.puravidabracelets.ca; and Vera Bradley Indirect branded products to specialty retail locations, department stores, national accounts, third party e-commerce sites, third-party inventory liquidators, and through licensing agreements. Vera Bradley, Inc. was incorporated in 1982 and is headquartered in Roanoke, Indiana.