Critical Survey: EHang (NASDAQ:EH) vs. Leonardo DRS (NASDAQ:DRS)

Leonardo DRS (NASDAQ:DRS) and EHang (NASDAQ:EH) are both aerospace companies, but which is the better business? We will contrast the two companies based on the strength of their institutional ownership, earnings, analyst recommendations, risk, profitability, dividends and valuation.

Insider & Institutional Ownership

18.8% of Leonardo DRS shares are owned by institutional investors. Comparatively, 94.0% of EHang shares are owned by institutional investors. 0.3% of Leonardo DRS shares are owned by company insiders. Comparatively, 39.6% of EHang shares are owned by company 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.

Earnings and Valuation

This table compares Leonardo DRS and EHang”s revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Leonardo DRS	$3.65 billion	3.46	$278.00 million	$1.07	44.25
EHang	$72.86 million	6.89	-$39.47 million	($0.44)	-15.18

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

Profitability

This table compares Leonardo DRS and EHang’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Leonardo DRS	7.85%	12.02%	7.59%
EHang	-44.56%	-21.16%	-11.75%

Analyst Recommendations

This is a breakdown of recent ratings for Leonardo DRS and EHang, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Leonardo DRS	0	4	3	1	2.63
EHang	1	2	2	0	2.20

Leonardo DRS presently has a consensus target price of $52.00, indicating a potential upside of 9.82%. EHang has a consensus target price of $12.05, indicating a potential upside of 80.39%. Given EHang’s higher possible upside, analysts clearly believe EHang is more favorable than Leonardo DRS.

Volatility and Risk

Leonardo DRS has a beta of 0.34, meaning that its share price is 66% less volatile than the S&P 500. Comparatively, EHang has a beta of 1.13, meaning that its share price is 13% more volatile than the S&P 500.

Summary

Leonardo DRS beats EHang on 10 of the 15 factors compared between the two stocks.

About Leonardo DRS

Leonardo DRS, Inc., together with its subsidiaries, provides defense electronic products and systems, and military support services. It operates through Advanced Sensing and Computing (ASC) segment, and Integrated Mission Systems (IMS) segments. The ASC segment designs, develops, and manufacture sensing and network computing technology that enables real-time situational awareness required for enhanced operational decision making and execution; and offers sensing capabilities span applications, such as missions requiring advanced detection, precision targeting and surveillance sensing, long range electro-optic/infrared, signals intelligence, and other intelligence systems including electronic warfare, ground vehicle sensing, active electronically scanned array tactical radars, dismounted soldier, and space sensing. This segment also provides network computing, which are utilized across a range of mission applications including platform computing on ground and shipboard for advanced battle management, combat systems, radar, command and control, tactical networks, tactical computing, and communications. The IMS segment designs, develops, manufacture, and integrates power conversion, control, and distribution systems, ship propulsion systems, motors and variable frequency drives, force protection systems, transportation, and logistics systems for the U.S. and allied defense customers. This segment also offers electrical propulsion systems, which includes power conversion, control, distribution, and propulsion systems, as well as power dense permanent magnet motors, energy storage systems and associated efficient, rugged, and compact power conversion, electrical actuation systems, as well as cooling technologies; and motor controllers, instrumentation and control equipment, electrical actuation systems, and thermal management systems. The company was incorporated in 1968 and is based in Arlington, Virginia. Leonardo DRS, Inc. operates as a subsidiary of Leonardo S.p.A.

About EHang

EHang Holdings Limited operates as an autonomous aerial vehicle (AAV) technology platform company in the People's Republic of China, East Asia, West Asia, Europe, and internationally. It designs, develops, manufactures, sells, and operates AAVs, as well as their supporting systems and infrastructure for various industries and applications, including passenger transportation, logistics, smart city management, and aerial media solutions. The company was incorporated in 2014 and is headquartered in Guangzhou, the People's Republic of China.