Financial Contrast: FIGS (NYSE:FIGS) and Five Below (NASDAQ:FIVE)

Five Below (NASDAQ:FIVE) and FIGS (NYSE:FIGS) are both consumer discretionary companies, but which is the superior business? We will compare the two companies based on the strength of their profitability, dividends, risk, analyst recommendations, institutional ownership, valuation and earnings.

Profitability

This table compares Five Below and FIGS’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Five Below	8.67%	21.31%	9.19%
FIGS	6.10%	9.69%	7.37%

Risk & Volatility

Five Below has a beta of 0.98, suggesting that its stock price is 2% less volatile than the S&P 500. Comparatively, FIGS has a beta of 1.03, suggesting that its stock price is 3% more volatile than the S&P 500.

Insider and Institutional Ownership

92.2% of FIGS shares are owned by institutional investors. 1.0% of Five Below shares are owned by insiders. Comparatively, 27.1% of FIGS shares are owned by insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock will outperform the market over the long term.

Earnings and Valuation

This table compares Five Below and FIGS”s revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Five Below	$4.76 billion	2.52	$358.64 million	$7.92	27.42
FIGS	$631.10 million	2.83	$34.25 million	$0.22	48.61

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

Analyst Ratings

This is a breakdown of current recommendations and price targets for Five Below and FIGS, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Five Below	1	9	18	1	2.66
FIGS	0	6	4	1	2.55

Five Below currently has a consensus price target of $254.05, suggesting a potential upside of 17.00%. FIGS has a consensus price target of $15.93, suggesting a potential upside of 48.93%. Given FIGS’s higher probable upside, analysts clearly believe FIGS is more favorable than Five Below.

Summary

Five Below beats FIGS on 8 of the 14 factors compared between the two stocks.

About Five Below

Five Below, Inc. operates as a specialty value retailer in the United States. The company offers range of accessories, which includes novelty socks, sunglasses, jewelry, scarves, gloves, hair accessories, athletic tops and bottoms, and t-shirts, as well as nail polish, lip gloss, fragrance, and branded cosmetics; and personalized living space products, such as lamps, posters, frames, fleece blankets, plush items, pillows, candles, incense, lighting, novelty décor, accent furniture, and related items, as well as provides storage options. It provides assortment of sports balls, team sports merchandise, and fitness accessories comprising hand weights, jump ropes, and gym balls; various games, such as board games, puzzles, collectibles, and toys, including remote control; and summer season sports, which includes pool, beach, and outdoor toys, as well as games and accessories. In addition, the company offers accessories for cell phones, tablets, audio, and computers, as well as cases, chargers, headphones, and other related items; and media products including books, video games, and DVDs. It also provides assortment of craft activity kits, and arts and crafts supplies, such as crayons, markers, and stickers; and school products comprising backpacks, fashion notebooks and journals, novelty pens and pencils, and locker accessories. Further, the company offers party products, which includes party goods, decorations, gag gifts, and greeting cards, as well as every day and special occasion merchandise; assortment of classic and novelty candy bars, movie-size box candy, seasonal-related candy, and gum and snack food products, as well as sells chilled drinks through coolers; and provides seasonally specific items used to celebrate and decorate for events. The company was formerly known as Cheap Holdings, Inc. and changed its name to Five Below, Inc. in August 2002. Five Below, Inc. was incorporated in 2002 and is headquartered in Philadelphia, Pennsylvania.

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.