Financial Analysis: Purple Innovation (NASDAQ:PRPL) & Beazer Homes USA (NYSE:BZH)

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

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 insiders. Comparatively, 54.0% of Purple Innovation shares are held by insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock will outperform the market over the long term.

Volatility & Risk

Beazer Homes USA has a beta of 2.17, indicating that its stock price is 117% more volatile than the S&P 500. Comparatively, Purple Innovation has a beta of 1.4, indicating that its stock price is 40% more volatile than the S&P 500.

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%

Valuation & Earnings

This table compares Beazer Homes USA and Purple Innovation”s top-line revenue, earnings per share 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)	-111.28
Purple Innovation	$453.45 million	0.02	-$51.41 million	($11.24)	-0.22

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.

Analyst Ratings

This is a breakdown of recent recommendations for Beazer Homes USA and Purple Innovation, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Beazer Homes USA	1	2	0	1	2.25
Purple Innovation	1	2	0	0	1.67

Purple Innovation has a consensus price target of $16.25, suggesting a potential upside of 557.89%. Given Purple Innovation’s higher probable upside, analysts clearly believe Purple Innovation is more favorable than Beazer Homes USA.

Summary

Beazer Homes USA beats Purple Innovation on 10 of the 14 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.