Analyzing Cricut (NASDAQ:CRCT) and Hovnanian Enterprises (NYSE:HOV)

Cricut (NASDAQ:CRCT) and Hovnanian Enterprises (NYSE:HOV) are both small-cap consumer discretionary companies, but which is the superior business? We will contrast the two companies based on the strength of their dividends, profitability, risk, valuation, institutional ownership, analyst recommendations and earnings.

Analyst Ratings

This is a summary of current recommendations and price targets for Cricut and Hovnanian Enterprises, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Cricut	4	2	0	0	1.33
Hovnanian Enterprises	2	2	0	0	1.50

Cricut currently has a consensus target price of $4.07, indicating a potential downside of 36.36%. Hovnanian Enterprises has a consensus target price of $74.00, indicating a potential downside of 30.25%. Given Hovnanian Enterprises’ stronger consensus rating and higher possible upside, analysts plainly believe Hovnanian Enterprises is more favorable than Cricut.

Risk and Volatility

Cricut has a beta of 0.25, meaning that its stock price is 75% less volatile than the S&P 500. Comparatively, Hovnanian Enterprises has a beta of 1.82, meaning that its stock price is 82% more volatile than the S&P 500.

Institutional & Insider Ownership

19.6% of Cricut shares are held by institutional investors. Comparatively, 65.4% of Hovnanian Enterprises shares are held by institutional investors. 16.5% of Cricut shares are held by company insiders. Comparatively, 22.7% of Hovnanian Enterprises shares are held by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock is poised for long-term growth.

Profitability

This table compares Cricut and Hovnanian Enterprises’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Cricut	12.71%	24.57%	15.42%
Hovnanian Enterprises	0.64%	8.64%	2.17%

Earnings & Valuation

This table compares Cricut and Hovnanian Enterprises”s top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Cricut	$708.78 million	1.89	$76.71 million	$0.43	14.86
Hovnanian Enterprises	$2.98 billion	0.21	$63.87 million	$0.95	111.67

Cricut has higher earnings, but lower revenue than Hovnanian Enterprises. Cricut is trading at a lower price-to-earnings ratio than Hovnanian Enterprises, indicating that it is currently the more affordable of the two stocks.

Summary

Hovnanian Enterprises beats Cricut on 8 of the 13 factors compared between the two stocks.

About Cricut

Cricut, Inc. engages in the design, marketing, and distribution of a creativity platform that enables users to turn ideas into professional-looking handmade goods. It operates through three segments: Connected Machines, Subscriptions, and Accessories and Materials. The company offers connected machines, design apps, and accessories and materials for users to create personalized birthday cards, mugs, T-shirts, and large-scale interior decorations. Its connected machines include Cricut Joy family for personalization, organization, and customization; Cricut Explore family for cutting, writing, and scoring; Cricut Maker family for cutting, writing, scoring, and adding decorative effects to various materials, such as paper, vinyl, iron-on vinyl, pens, and others; and Cricut Venture for cutting, writing, and scoring large-format projects at professional speeds. The company also provides Cricut Access and Cricut Access Premium subscription offerings, and in-app purchases; and a software that integrates its connected machines and design apps comprising Cricut Joy App, Design Space, and other design apps. In addition, it offers a range of accessories and materials, such as Cricut EasyPress, Cricut Mug Press, hand tools, machine replacement tools and blades, and project materials. The company offers its products through its third-party brick-and-mortar and online retail partners; and its website cricut.com, as well as through a network of distributors. It operates in the United States, Canada, the United Kingdom, Ireland, Australia, New Zealand, and Western Europe, as well as the Middle East, Latin America, South Africa, and Asia. The company was formerly known as Provo Craft & Novelty, Inc. and changed its name to Cricut, Inc. in March 2018. The company was incorporated in 1969 and is headquartered in South Jordan, Utah.

About Hovnanian Enterprises

Hovnanian Enterprises, Inc., through its subsidiaries, designs, constructs, markets, and sells residential homes in the United States. It offers single-family detached homes, attached townhomes and condominiums, urban infill, and active lifestyle homes with amenities, such as clubhouses, swimming pools, tennis courts, tot lots, and open areas. The company markets and builds homes for first-time buyers, first-time and second-time move-up buyers, luxury buyers, active lifestyle buyers, and empty nesters. It also provides mortgage loans, title insurance, and homeowner’s insurance services. The company was founded in 1959 and is headquartered in Matawan, New Jersey.