Analyzing REE Automotive (NASDAQ:REE) & Holley (NYSE:HLLY)

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

Profitability

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

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

Risk & Volatility

Holley has a beta of 1.32, indicating that its stock price is 32% more volatile than the S&P 500. Comparatively, REE Automotive has a beta of 2.4, indicating that its stock price is 140% more volatile than the S&P 500.

Analyst Ratings

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

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Holley	1	2	3	1	2.57
REE Automotive	1	0	0	0	1.00

Holley currently has a consensus price target of $4.90, suggesting a potential upside of 97.18%. Given Holley’s stronger consensus rating and higher possible upside, equities analysts plainly believe Holley is more favorable than REE Automotive.

Insider & Institutional Ownership

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

Earnings and Valuation

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

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Holley	$613.15 million	0.49	$19.17 million	$0.08	31.06
REE Automotive	$1.30 million	1.87	-$55.81 million	($5.28)	-0.01

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.

Summary

Holley beats REE Automotive on 13 of the 15 factors compared between the two stocks.

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.

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.