Financial Analysis: Destination XL Group (NASDAQ:DXLG) vs. Torrid (NYSE:CURV)

Torrid (NYSE:CURV) and Destination XL Group (NASDAQ:DXLG) are both small-cap retail/wholesale companies, but which is the better stock? We will compare the two companies based on the strength of their valuation, earnings, dividends, risk, profitability, analyst recommendations and institutional ownership.

Institutional & Insider Ownership

81.8% of Torrid shares are held by institutional investors. Comparatively, 73.5% of Destination XL Group shares are held by institutional investors. 9.8% of Torrid shares are held by insiders. Comparatively, 12.4% of Destination XL Group shares are held by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock will outperform the market over the long term.

Analyst Recommendations

This is a breakdown of recent recommendations for Torrid and Destination XL Group, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Torrid	1	2	2	0	2.20
Destination XL Group	0	1	1	0	2.50

Torrid currently has a consensus target price of $6.13, indicating a potential upside of 70.14%. Destination XL Group has a consensus target price of $3.50, indicating a potential upside of 30.11%. Given Torrid’s higher possible upside, equities analysts plainly believe Torrid is more favorable than Destination XL Group.

Valuation and Earnings

This table compares Torrid and Destination XL Group”s top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Torrid	$1.15 billion	0.33	$11.62 million	$0.13	27.69
Destination XL Group	$521.82 million	0.30	$27.85 million	$0.24	11.21

Destination XL Group has lower revenue, but higher earnings than Torrid. Destination XL Group is trading at a lower price-to-earnings ratio than Torrid, indicating that it is currently the more affordable of the two stocks.

Profitability

This table compares Torrid and Destination XL Group’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Torrid	1.21%	-6.77%	2.80%
Destination XL Group	3.11%	11.10%	4.54%

Volatility & Risk

Torrid has a beta of 1.95, indicating that its stock price is 95% more volatile than the S&P 500. Comparatively, Destination XL Group has a beta of 1.3, indicating that its stock price is 30% more volatile than the S&P 500.

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 Destination XL Group

Destination XL Group, Inc., together with its subsidiaries, operates as a specialty retailer of big and tall men’s clothing and shoes in the United States. The company’s stores offer sportswear and dresswear; fashion-neutral items, including jeans, casual pants, T-shirts, polo shirts, dress shirts, and suit separates; and casual clothing. It also provides vintage-screen T-shirts and wovens under various private labels. The company offers its products under the trade names of Destination XL, DXL, DXL Men’s Apparel, DXL outlets, Casual Male XL, and Casual Male XL outlets. The company was formerly known as Casual Male Retail Group, Inc. and changed its name to Destination XL Group, Inc. in February 2013. Destination XL Group, Inc. was incorporated in 1976 and is headquartered in Canton, Massachusetts.