Critical Analysis: Virco Manufacturing (NASDAQ:VIRC) & HomesToLife (NASDAQ:HTLM)

HomesToLife (NASDAQ:HTLM) and Virco Manufacturing (NASDAQ:VIRC) are both small-cap consumer discretionary companies, but which is the superior business? We will compare the two companies based on the strength of their valuation, analyst recommendations, risk, dividends, earnings, institutional ownership and profitability.

Analyst Recommendations

This is a breakdown of current recommendations for HomesToLife and Virco Manufacturing, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
HomesToLife	1	0	0	0	1.00
Virco Manufacturing	0	2	1	0	2.33

Virco Manufacturing has a consensus price target of $17.00, indicating a potential upside of 128.49%. Given Virco Manufacturing’s stronger consensus rating and higher probable upside, analysts clearly believe Virco Manufacturing is more favorable than HomesToLife.

Insider and Institutional Ownership

31.0% of Virco Manufacturing shares are owned by institutional investors. 18.1% of Virco Manufacturing shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company is poised for long-term growth.

Risk and Volatility

HomesToLife has a beta of -1.79, indicating that its stock price is 279% less volatile than the S&P 500. Comparatively, Virco Manufacturing has a beta of 0.22, indicating that its stock price is 78% less volatile than the S&P 500.

Profitability

This table compares HomesToLife and Virco Manufacturing’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
HomesToLife	N/A	N/A	N/A
Virco Manufacturing	5.74%	12.04%	6.85%

Earnings & Valuation

This table compares HomesToLife and Virco Manufacturing”s revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
HomesToLife	$4.17 million	10.64	-$1.67 million	$0.04	75.50
Virco Manufacturing	$266.24 million	0.44	$21.64 million	$0.87	8.55

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

Summary

Virco Manufacturing beats HomesToLife on 12 of the 14 factors compared between the two stocks.

About HomesToLife

HomesToLife Ltd. engages in the retail of home furniture and sale of customized furniture solutions. Its products include leather and fabric upholstered furniture, case goods, and accessories. The company was founded by Yong Pin Phua and Yong Tat Phua in September 1989 and is headquartered in Singapore.

About Virco Manufacturing

Virco Mfg. Corporation engages in the design, production, and distribution of furniture in the United States and Canada. The company offers seating products, including 4-leg chairs, cantilever chairs, mobile task chairs and lab stools, tablet armchairs, steel-frame and floor rockers, series stools, hard plastic seating, folding and upholstered stack chairs, and plastic stack and upholstered ergonomic chairs. It also provides activity, butcher block, folding, office, technology, and mobile tables; desks and workstations, and instructor media stations and towers; chair desks and combo units, tablet arm and caster units, mobile workstations, student desks, and returns and credenzas; and computer furniture solutions. In addition, the company provides administrative office furniture, including desks, returns, bookcases, and other items, as well as steel storage cabinets, wardrobe tower cabinets, file credenzas, and mobile pedestals; laboratory furniture comprising steel-based science tables, table bases, lab stools, and wood-frame science tables; mobile furniture, such as mobile tables, mobile cabinets, and mobile chairs for school settings and offices; and handling and storage equipment, and stackable storage trucks. It serves public and private educational institutions, charter schools, convention centers and arenas, hospitality providers, government facilities, and places of worship through its sales and support teams, and dealers' network. Virco Mfg. Corporation was incorporated in 1950 and is headquartered in Torrance, California.