Critical Analysis: Virco Manufacturing (NASDAQ:VIRC) and HomesToLife (NASDAQ:HTLM)

HomesToLife (NASDAQ:HTLM) and Virco Manufacturing (NASDAQ:VIRC) are both small-cap consumer discretionary companies, but which is the superior business? We will compare the two businesses based on the strength of their profitability, institutional ownership, earnings, analyst recommendations, risk, dividends and valuation.

Insider & Institutional Ownership

31.0% of Virco Manufacturing shares are owned by institutional investors. 18.1% of Virco Manufacturing shares are owned by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company is poised for long-term growth.

Profitability

This table compares HomesToLife and Virco Manufacturing’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
HomesToLife	N/A	N/A	N/A
Virco Manufacturing	5.74%	12.04%	6.85%

Valuation & Earnings

This table compares HomesToLife and Virco Manufacturing”s revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
HomesToLife	$4.17 million	10.22	-$1.67 million	$0.04	72.50
Virco Manufacturing	$236.93 million	0.47	$21.64 million	$0.87	8.13

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

Analyst Ratings

This is a summary of current ratings and target prices for HomesToLife and Virco Manufacturing, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
HomesToLife	1	0	0	0	1.00
Virco Manufacturing	0	2	1	0	2.33

Virco Manufacturing has a consensus target price of $17.00, suggesting a potential upside of 140.28%. Given Virco Manufacturing’s stronger consensus rating and higher possible upside, analysts plainly believe Virco Manufacturing is more favorable than HomesToLife.

Summary

Virco Manufacturing beats HomesToLife on 11 of the 13 factors compared between the two stocks.

About HomesToLife

HomesToLife Ltd. engages in the retail of home furniture and sale of customized furniture solutions. Its products include leather and fabric upholstered furniture, case goods, and accessories. The company was founded by Yong Pin Phua and Yong Tat Phua in September 1989 and is headquartered in Singapore.

About Virco Manufacturing

Virco Mfg. Corporation engages in the design, production, and distribution of furniture in the United States and Canada. The company offers seating products, including 4-leg chairs, cantilever chairs, mobile task chairs and lab stools, tablet armchairs, steel-frame and floor rockers, series stools, hard plastic seating, folding and upholstered stack chairs, and plastic stack and upholstered ergonomic chairs. It also provides activity, butcher block, folding, office, technology, and mobile tables; desks and workstations, and instructor media stations and towers; chair desks and combo units, tablet arm and caster units, mobile workstations, student desks, and returns and credenzas; and computer furniture solutions. In addition, the company provides administrative office furniture, including desks, returns, bookcases, and other items, as well as steel storage cabinets, wardrobe tower cabinets, file credenzas, and mobile pedestals; laboratory furniture comprising steel-based science tables, table bases, lab stools, and wood-frame science tables; mobile furniture, such as mobile tables, mobile cabinets, and mobile chairs for school settings and offices; and handling and storage equipment, and stackable storage trucks. It serves public and private educational institutions, charter schools, convention centers and arenas, hospitality providers, government facilities, and places of worship through its sales and support teams, and dealers' network. Virco Mfg. Corporation was incorporated in 1950 and is headquartered in Torrance, California.