Financial Review: Winmark (NASDAQ:WINA) vs. Arhaus (NASDAQ:ARHS)

Arhaus (NASDAQ:ARHS) and Winmark (NASDAQ:WINA) are both small-cap retail/wholesale companies, but which is the superior investment? We will contrast the two businesses based on the strength of their institutional ownership, valuation, dividends, profitability, earnings, analyst recommendations and risk.

Valuation & Earnings

This table compares Arhaus and Winmark”s gross revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Arhaus	$1.27 billion	1.16	$68.55 million	$0.52	20.15
Winmark	$84.52 million	17.73	$39.95 million	$11.22	37.49

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

Profitability

This table compares Arhaus and Winmark’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Arhaus	5.40%	19.62%	5.61%
Winmark	48.84%	-103.08%	102.66%

Insider & Institutional Ownership

27.9% of Arhaus shares are owned by institutional investors. Comparatively, 73.3% of Winmark shares are owned by institutional investors. 1.5% of Arhaus shares are owned by insiders. Comparatively, 10.1% of Winmark shares are owned by insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock will outperform the market over the long term.

Volatility and Risk

Arhaus has a beta of 2.52, indicating that its stock price is 152% more volatile than the S&P 500. Comparatively, Winmark has a beta of 0.69, indicating that its stock price is 31% less volatile than the S&P 500.

Analyst Ratings

This is a breakdown of current recommendations for Arhaus and Winmark, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Arhaus	0	11	3	0	2.21
Winmark	0	0	1	0	3.00

Arhaus presently has a consensus target price of $11.11, indicating a potential upside of 6.02%. Given Arhaus’ higher probable upside, analysts plainly believe Arhaus is more favorable than Winmark.

Summary

Winmark beats Arhaus on 8 of the 14 factors compared between the two stocks.

About Arhaus

Arhaus, Inc. operates as a lifestyle brand and premium retailer in the home furnishings market in the United States. It provides merchandise assortments across various categories, including furniture, lighting, textiles, décor, and outdoor. The company's furniture products comprise bedroom, dining room, living room, and home office furnishings, which includes sofas, dining tables and chairs, accent chairs, console and coffee tables, beds, headboards, dressers, desks, bookcases, modular storage, and other items; and outdoor products, such as outdoor dining tables, chairs, chaises and other furniture, lighting, textiles, décor, umbrellas, and fire pits. It offers lighting products, including various distinct and artistic lighting fixtures comprising chandeliers, pendants, table and floor lamps, and sconces; textile products, such as handcrafted indoor and outdoor rugs, bed linens, and pillows and throws; and décor products, including various wall art to mirrors, vases to candles, and other decorative accessories. The company distributes its products through an omni-channel model comprising showrooms, e-commerce platform, print and digital media, and in-home designer services. Arhaus, Inc. was founded in 1986 and is headquartered in Boston Heights, Ohio.

About Winmark

Winmark Corporation, a resale company operates as a franchisor for small business in the United States and Canada. The company franchises retail stores concepts that buy, sell and trade merchandise. It also operates middle-market equipment leasing business. In addition, the company buys and sells used clothing and accessories geared toward the teenage and young adult market under Plato’s Closet brand; and operates stores which buys and sells used and new children’s clothing, toys, furniture, equipment, and accessories primarily to parents of children ages infant to 12 years under the Once Upon A Child brand. Further, it buys, sells, trades in, and used and new sporting goods, equipment, and accessories for various athletic activities including team sports, such as baseball/softball, hockey, football, lacrosse, and soccer, as well as fitness, ski/snowboard, golf, and others under the Play It Again Sports brand; and buys and sells used women’s apparel, shoes, and accessories under the Style Encore brand. Additionally, the company buys, sells, trades in, and used and new musical instruments, speakers, amplifiers, music-related electronics, and related accessories under the Music Go Round brand. Winmark Corporation was incorporated in 1988 and is headquartered in Minneapolis, Minnesota.