Zalando (OTCMKTS:ZLNDY) versus Sportsman’s Warehouse (NASDAQ:SPWH) Critical Contrast

Zalando (OTCMKTS:ZLNDY) and Sportsman’s Warehouse (NASDAQ:SPWH) are both retail/wholesale companies, but which is the better business? We will contrast the two businesses based on the strength of their valuation, dividends, analyst recommendations, risk, institutional ownership, profitability and earnings.

Profitability

This table compares Zalando and Sportsman’s Warehouse’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Zalando	1.76%	7.90%	2.61%
Sportsman’s Warehouse	-4.14%	-10.30%	-2.38%

Institutional and Insider Ownership

83.0% of Sportsman’s Warehouse shares are held by institutional investors. 1.8% of Sportsman’s Warehouse shares are held by insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a company is poised for long-term growth.

Valuation and Earnings

This table compares Zalando and Sportsman’s Warehouse”s top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Zalando	$13.97 billion	0.45	$243.31 million	$0.48	25.02
Sportsman’s Warehouse	$1.21 billion	0.05	-$33.06 million	($1.30)	-1.10

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

Volatility and Risk

Zalando has a beta of 1.61, meaning that its stock price is 61% more volatile than the S&P 500. Comparatively, Sportsman’s Warehouse has a beta of 0.46, meaning that its stock price is 54% less volatile than the S&P 500.

Analyst Recommendations

This is a breakdown of recent ratings for Zalando and Sportsman’s Warehouse, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Zalando	1	2	3	0	2.33
Sportsman’s Warehouse	1	1	3	0	2.40

Sportsman’s Warehouse has a consensus target price of $2.94, indicating a potential upside of 105.42%. Given Sportsman’s Warehouse’s stronger consensus rating and higher possible upside, analysts clearly believe Sportsman’s Warehouse is more favorable than Zalando.

Summary

Zalando beats Sportsman’s Warehouse on 9 of the 13 factors compared between the two stocks.

About Zalando

Zalando SE operates an online platform for fashion and lifestyle products. The company operates through Fashion Store and Offprice segments. It provides shoes, apparel, accessories, and beauty products with free delivery and returns, as well as various payment options. The company also sells its products through Lounge by Zalando; and brick-and-mortar outlet stores. It operates in Germany, Austria, Switzerland, Belgium, Croatia, the Czech Republic, Denmark, Estonia, Finland, Hungary, France, Ireland, Italy, Latvia, Lithuania, Luxembourg, the Netherlands, Norway, Poland, Romania, Slovakia, Slovenia, Spain, Sweden, and the United Kingdom. The company was founded in 2008 and is headquartered in Berlin, Germany.

About Sportsman’s Warehouse

Sportsman’s Warehouse Holdings, Inc. engages in the retail of sporting and athletic goods. Its products include hunting and shooting, archery, fishing, camping, boating accessories, optics and electronics, knives and tools, and footwear. The company was founded in 1986 and is headquartered in West Jordan, UT.