Contrasting Holley (NYSE:HLLY) and REE Automotive (NASDAQ:REE)

REE Automotive (NASDAQ:REE) and Holley (NYSE:HLLY) are both small-cap consumer discretionary companies, but which is the superior stock? We will compare the two businesses based on the strength of their earnings, risk, valuation, profitability, dividends, analyst recommendations and institutional ownership.

Insider & Institutional Ownership

12.7% of REE Automotive shares are owned by institutional investors. Comparatively, 39.7% of Holley shares are owned by institutional investors. 4.9% of Holley shares are owned by company insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company will outperform the market over the long term.

Analyst Recommendations

This is a breakdown of recent recommendations and price targets for REE Automotive and Holley, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
REE Automotive	1	0	0	0	1.00
Holley	1	3	3	0	2.29

Holley has a consensus price target of $4.90, suggesting a potential upside of 97.98%. Given Holley’s stronger consensus rating and higher probable upside, analysts clearly believe Holley is more favorable than REE Automotive.

Profitability

This table compares REE Automotive and Holley’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
REE Automotive	N/A	N/A	N/A
Holley	1.68%	8.41%	3.23%

Valuation and Earnings

This table compares REE Automotive and Holley”s gross revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
REE Automotive	$1.30 million	1.87	-$55.81 million	($5.28)	-0.01
Holley	$613.51 million	0.49	$19.17 million	$0.08	30.94

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

Risk & Volatility

REE Automotive has a beta of 2.4, suggesting that its stock price is 140% more volatile than the S&P 500. Comparatively, Holley has a beta of 1.39, suggesting that its stock price is 39% more volatile than the S&P 500.

Summary

Holley beats REE Automotive on 12 of the 14 factors compared between the two stocks.

About REE Automotive

REE Automotive Ltd. operates as an automotive technology company in France, the United Kingdom, the United States, and internationally. The company offers REEcorner, a compact module that integrates critical vehicle drive components comprising as steering, braking, suspension, powertrain, and control between the chassis and the wheel; and REEplatform that allows for the addition of a modular and customizable top hat/cabin design based on customer specifications, without requiring modification to the platform. It also provides P7-S Strip Chassis for commercial delivery vehicles and walk-in vans; P7-C Chassis Cab and Cutway Chassis, a class 4 chassis cab fully electric commercial truck for delivery and a range of vocational applications; and P7-B Box Truck, a class 3 box truck built on a P7 cab chassis with its all-wheel drive and all-wheel steer for vehicle control for better handling and safety in adverse conditions. It serves original equipment manufacturer, delivery and logistic fleets, dealers, e-commerce retailers, new mobility players, mobility-as-a-service providers, and autonomous drive companies. The company is headquartered in Herzliya, Israel.

About Holley

Holley Inc. operates as designer, manufacturer, and marketer of automotive aftermarket products for car and truck enthusiasts in the United States, Canada, Europe, and China. Its products span various automotive platforms and sells across multiple channels. The company's performance automotive products include carburetors, fuel pumps, fuel injection systems, nitrous oxide injection systems, superchargers, exhaust headers, mufflers, distributors, ignition components, engine tuners, automotive performance plumbing products; and exhaust products, as well as shifters, converters, transmission kits, transmissions, tuners, and automotive software. It also offers brakes and brake systems, vehicle restoration parts, helmets, head and neck restraints, seat belts, fire suits, and electronic control and monitoring systems. The company sells its products under the Holley, Holley EFI, MSD, Simpson, Powerteq, Accel, and Flowmaster through DTC, E-tailer, warehouse distributor, traditional retailer, and jobber/ installer channels. Holley Inc. was founded in 1903 and is headquartered in Bowling Green, Kentucky.