Women in leadership roles statistically add to profitability, but which female-led businesses should you invest in today?
Women are underrepresented in the world of business — of the 440 companies that filed for IPO in the U.S. in 2020, just 20 of these companies were led by women, and just 6% of the companies listed in the S&P 500 today are led by women. Here are three great companies that are led by women.
Stitch Fix (NASDAQ: SFIX) is an online personal styling service in the U.S. that uses recommendation algorithms and data science to personalize the service for each customer founded by CEO Katrina Lake in 2011. Lake took Stitch Fix through its IPO at 34, making her the youngest female founder to ever lead an IPO, before Whitney Wolfe Herd took Bumble public at 31. Stitch Fix stock has performed well over the last 2 years, reaching $100 per share for the first time in January 2021, 4 times what it was worth at the start of 2020. Stitch Fix still has some growth momentum, as consumers become more and more comfortable with the company’s modern, tech-heavy approach towards fashion shopping.
Stitch Fix has a major advantage over other fashion brands — it can leverage its data so that it’s always up to date with constantly changing consumer tastes. The company’s impressive data science has allowed it to pack more accurate delivery boxes, meaning that customers buy more of the stylists’ suggestions, resulting in fewer returns and increased revenue. This deep connection with consumer tastes is rare, and we don’t experience this when we shop with most fashion brands. The company has recently expanded its model into different product lines, such as kids, outerwear, and sportswear.
Lake announced that fiscal Q2 2021 saw growth of 12% to over 400,000 customers, bringing the total to 3.9 million. This October, Stitch Fix plans to open a 700,000 square foot warehouse with 400 employees in Utah in order to cut costs and improve margins. Net sales rose by 12% to $504 million in Q2, and the company expects revenue for the full fiscal year 2021 to increase by 18% to 20%.
Bumble (NYSE: BMBL) is both a female-led and female-centered dating app that went public in February. The company has disrupted the online dating industry with its namesake app and Badoo, another dating app popular in South America and Asia.
Bumble’s founder, Whitney Wolfe Herd, is hugely experienced and was a co-founder at Match Group’s Tinder. Bumble is different from Tinder as it only allows women to make the first move. Bumble has really differentiated itself from the other products on the market, resulting in a highly engaged user base with strong brand recognition.
The namesake app has just over 5 million users in the U.S., with 42 million global monthly active users. The company reported 2.7 million paying users in Q4 2020, up 32.5% from Q4 2019. Q4 2020 revenue stood at $165.6 million, an impressive 31% YoY increase, with the Bumble app seeing a 47% increase in revenue and Badoo a 10% increase. Revenue from the end of January to December 31, 2020 revenue climbed to $542.2 million, compared to $488.9 million the year previous.
Arista Networks (NYSE: ANET) is a technology company that builds scalable high-performance and ultra-low-latency networks for data centers and cloud computing systems. Arista Networks has been headed by Jayshree Ullal since 2008 and she led the company through its 2014 IPO. Ullal gained the company a significant market share in the high-speed data switching market by innovating and addressing consumers’ needs for performance and scalability, which market-leader Cisco lacked.
Arista Networks has continued innovating and has led acquisitions that have helped the company diversify and reduce its dependence on its data services which have customers like Microsoft, Dell, and Intel. Arista Networks now offer Wi-Fi services, cybersecurity, plus media and entertainment solutions.
The company had a difficult 2020 but nonetheless saw revenue growth of 17.4% YoY to $648.5 million in Q4 2020 and full-year revenue of $2.32 billion, down 3.9% from 2019. Its GAAP gross margin dipped slightly compared to Q4 2019 but stood at an impressive 63.9%, with non-GAAP gross margins coming in at 65%. Arista has performed excellently in the industry since its IPO in 2014, with its stock growing 6.5x since, and will continue to do so for years to come with its ever-improving product and expanding addressable market, which is expected to grow from $23 billion in 2021 to $33 billion in 2025.
A MyWallSt subscription gives you access to over 100 market-beating stock picks and the research to back them up. Our analyst team post daily insights, subscriber-only podcasts and the headlines that move the market. Get your free access now!
MyWallSt operates a full disclosure policy. MyWallSt staff currently holds long positions in companies mentioned above. Read our full disclosure policy here.