Critical Survey: Beazer Homes USA (NYSE:BZH) vs. Purple Innovation (NASDAQ:PRPL)

Beazer Homes USA (NYSE:BZH) and Purple Innovation (NASDAQ:PRPL) are both small-cap consumer discretionary companies, but which is the better business? We will contrast the two businesses based on the strength of their institutional ownership, valuation, analyst recommendations, profitability, dividends, earnings and risk.

Analyst Recommendations

This is a breakdown of recent ratings and recommmendations for Beazer Homes USA and Purple Innovation, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Beazer Homes USA	1	3	0	0	1.75
Purple Innovation	1	2	0	0	1.67

Purple Innovation has a consensus target price of $16.25, indicating a potential upside of 673.81%. Given Purple Innovation’s higher probable upside, analysts clearly believe Purple Innovation is more favorable than Beazer Homes USA.

Risk and Volatility

Beazer Homes USA has a beta of 2.19, suggesting that its share price is 119% more volatile than the S&P 500. Comparatively, Purple Innovation has a beta of 1.45, suggesting that its share price is 45% more volatile than the S&P 500.

Earnings & Valuation

This table compares Beazer Homes USA and Purple Innovation”s top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Beazer Homes USA	$2.37 billion	0.38	$45.59 million	($0.30)	-111.35
Purple Innovation	$453.45 million	0.02	-$51.41 million	($11.24)	-0.19

Beazer Homes USA has higher revenue and earnings than Purple Innovation. Beazer Homes USA is trading at a lower price-to-earnings ratio than Purple Innovation, indicating that it is currently the more affordable of the two stocks.

Institutional and Insider Ownership

85.7% of Beazer Homes USA shares are held by institutional investors. Comparatively, 88.4% of Purple Innovation shares are held by institutional investors. 8.0% of Beazer Homes USA shares are held by company insiders. Comparatively, 54.0% of Purple Innovation shares are held by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock is poised for long-term growth.

Profitability

This table compares Beazer Homes USA and Purple Innovation’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Beazer Homes USA	-0.37%	0.18%	0.08%
Purple Innovation	-10.74%	N/A	-10.89%

Summary

Beazer Homes USA beats Purple Innovation on 9 of the 13 factors compared between the two stocks.

About Beazer Homes USA

Beazer Homes USA, Inc. operates as a homebuilder in the United States. It designs, constructs, and sells single-family and multi-family homes under the Beazer Homes, Gatherings, and Choice Plans names. The company also sells its homes through commissioned new home sales counselors and independent brokers in Arizona, California, Nevada, Texas, Indiana, Delaware, Maryland, Tennessee, Virginia, Florida, Georgia, North Carolina, and South Carolina. Beazer Homes USA, Inc. was founded in 1985 and is headquartered in Atlanta, Georgia.

About Purple Innovation

Purple Innovation, Inc. designs and manufactures sleep and other products in the United States and internationally. The company offers mattresses, pillows, cushions, bases, sheets, platforms, adjustable bases, mattress protectors, foundations, blankets, duvets, duvet covers, seat cushions, and pet beds under the Purple brand. It markets and sells its products through its e-commerce online channels, retail brick-and-mortar wholesale partners, third-party online retailers, and Purple showrooms, as well as through its website, Purple.com. The company was founded in 2010 and is headquartered in Lehi, Utah.