Destination XL Group (NASDAQ:DXLG) and Torrid (NYSE:CURV) Critical Survey

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

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 and Risk

Torrid has a beta of 1.96, indicating that its share price is 96% more volatile than the S&P 500. Comparatively, Destination XL Group has a beta of 1.32, indicating that its share price is 32% more volatile than the S&P 500.

Insider & Institutional 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 endowments, large money managers and hedge funds believe a stock will outperform the market over the long term.

Analyst Ratings

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

	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 presently has a consensus target price of $6.13, indicating a potential upside of 71.57%. Destination XL Group has a consensus target price of $3.50, indicating a potential upside of 28.21%. Given Torrid’s higher probable upside, equities research analysts plainly believe Torrid is more favorable than Destination XL Group.

Valuation & Earnings

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

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Torrid	$1.15 billion	0.32	$11.62 million	$0.13	27.46
Destination XL Group	$496.64 million	0.32	$27.85 million	$0.24	11.38

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.

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.