Aterian (NASDAQ:ATER – Get Free Report) and Smith Douglas Homes (NYSE:SDHC – Get Free Report) are both small-cap consumer discretionary companies, but which is the superior business? We will compare the two companies based on the strength of their risk, profitability, dividends, institutional ownership, valuation, earnings and analyst recommendations.
Analyst Recommendations
This is a breakdown of recent ratings and price targets for Aterian and Smith Douglas Homes, as provided by MarketBeat.com.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score | |
| Aterian | 1 | 0 | 0 | 0 | 1.00 |
| Smith Douglas Homes | 1 | 7 | 1 | 0 | 2.00 |
Smith Douglas Homes has a consensus target price of $11.38, indicating a potential upside of 10.98%. Given Smith Douglas Homes’ stronger consensus rating and higher possible upside, analysts clearly believe Smith Douglas Homes is more favorable than Aterian.
Valuation and Earnings
This table compares Aterian and Smith Douglas Homes”s gross revenue, earnings per share and valuation.
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio | |
| Aterian | $68.97 million | 0.11 | -$18.98 million | ($1.99) | -0.38 |
| Smith Douglas Homes | $971.12 million | 0.54 | $10.69 million | $0.72 | 14.24 |
Smith Douglas Homes has higher revenue and earnings than Aterian. Aterian is trading at a lower price-to-earnings ratio than Smith Douglas Homes, indicating that it is currently the more affordable of the two stocks.
Insider & Institutional Ownership
7.0% of Aterian shares are held by institutional investors. 19.5% of Aterian shares are held by company insiders. Comparatively, 84.2% of Smith Douglas Homes shares are held by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock is poised for long-term growth.
Profitability
This table compares Aterian and Smith Douglas Homes’ net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets | |
| Aterian | -49.30% | -92.04% | -47.83% |
| Smith Douglas Homes | 0.64% | -0.19% | -0.14% |
Volatility and Risk
Aterian has a beta of 1.2, indicating that its stock price is 20% more volatile than the S&P 500. Comparatively, Smith Douglas Homes has a beta of 0.9, indicating that its stock price is 10% less volatile than the S&P 500.
Summary
Smith Douglas Homes beats Aterian on 11 of the 13 factors compared between the two stocks.
About Aterian
Aterian, Inc., together with its subsidiaries, operates as a technology-enabled consumer products company in North America and internationally. Its platform offers home and kitchen appliances; kitchenware; cooling and air quality appliances, such as dehumidifiers; health and beauty products; and essential oils under the Squatty Potty, hOmeLabs, Mueller, Pursteam, Healing Solutions, and Photo Paper Direct brand names. The company primarily serves individual online consumers through online retail channels, such as Amazon and Walmart, as well as through its owned and operated websites and other marketplaces. The company was formerly known as Mohawk Group Holdings, Inc. and changed its name to Aterian, Inc. in April 2021. Aterian, Inc. was founded in 2014 and is headquartered in Summit, New Jersey.
About Smith Douglas Homes
Smith Douglas Homes Corp., together with its subsidiaries, engages in the design, construction, and sale of single-family homes in the southeastern United States. It also provides closing, escrow, and title insurance services. The company sells its products to entry-level and empty-nest homebuyers. Smith Douglas Homes Corp. was founded in 2008 and is headquartered in Woodstock, Georgia.
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