Head to Head Analysis: Lands’ End (NASDAQ:LE) versus GAP (NYSE:GAP)

GAP (NYSE:GAP) and Lands’ End (NASDAQ:LE) are both retail/wholesale companies, but which is the superior business? We will contrast the two companies based on the strength of their dividends, earnings, valuation, risk, analyst recommendations, profitability and institutional ownership.

Earnings and Valuation

This table compares GAP and Lands’ End”s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
GAP	$14.89 billion	0.65	$502.00 million	$2.16	11.94
Lands’ End	$1.47 billion	0.35	-$130.68 million	($4.16)	-3.95

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

Institutional & Insider Ownership

58.8% of GAP shares are held by institutional investors. Comparatively, 37.5% of Lands’ End shares are held by institutional investors. 31.0% of GAP shares are held by insiders. Comparatively, 1.3% of Lands’ End shares are held by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock is poised for long-term growth.

Analyst Ratings

This is a summary of current ratings and price targets for GAP and Lands’ End, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
GAP	1	4	6	0	2.45
Lands’ End	0	0	1	0	3.00

GAP currently has a consensus target price of $28.50, indicating a potential upside of 10.51%. Lands’ End has a consensus target price of $20.00, indicating a potential upside of 21.80%. Given Lands’ End’s stronger consensus rating and higher probable upside, analysts plainly believe Lands’ End is more favorable than GAP.

Volatility and Risk

GAP has a beta of 2.37, indicating that its share price is 137% more volatile than the S&P 500. Comparatively, Lands’ End has a beta of 2.76, indicating that its share price is 176% more volatile than the S&P 500.

Profitability

This table compares GAP and Lands’ End’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
GAP	5.40%	29.03%	7.26%
Lands’ End	-9.20%	-1.03%	-0.29%

Summary

GAP beats Lands’ End on 11 of the 14 factors compared between the two stocks.

About GAP

The Gap, Inc. operates as an apparel retail company. The company offers apparel, accessories, and personal care products for men, women, and children under the Old Navy, Gap, Banana Republic, and Athleta brands. Its products include adult apparel and accessories; and fitness and lifestyle products for use in yoga, training, sports, travel, and everyday activities for women and girls. The company offers its products through company-operated stores, franchise stores, websites, and third-party arrangements. It has franchise agreements to operate Old Navy, Gap, Banana Republic, and Athleta stores and websites in Asia, Europe, Latin America, the Middle East, and Africa. The Gap, Inc. was incorporated in 1969 and is headquartered in San Francisco, California.

About Lands’ End

Lands’ End, Inc. operates as a digital retailer of apparel, swimwear, outerwear, accessories, footwear, home products, and uniform in the United States, Europe, Asia, and internationally. It operates through U.S. eCommerce, International, Outfitters, Third Party, and Retail segments. The company also sells uniform and logo apparel. It sells its products through e-commerce and company operated stores, as well as through third party distribution channels under the Lands’ End, Lands’ End Lighthouse, Squall, Tugless Tank, Drifter, Outrigger, and Marinac, Beach Living brands, as well as Supima, No-Gape, Starfish, Little Black Suit, Iron Knees, Hyde Park, Year’ Rounder, ClassMate, Willis & Geiger, and ThermaCheck brands. Lands’ End, Inc. was founded in 1963 and is headquartered in Dodgeville, Wisconsin.