Critical Analysis: Newegg Commerce (NASDAQ:NEGG) and Home Depot (NYSE:HD)

Newegg Commerce (NASDAQ:NEGG) and Home Depot (NYSE:HD) are both consumer discretionary companies, but which is the superior investment? We will contrast the two companies based on the strength of their profitability, earnings, dividends, analyst recommendations, risk, valuation and institutional ownership.

Insider and Institutional Ownership

0.5% of Newegg Commerce shares are held by institutional investors. Comparatively, 70.9% of Home Depot shares are held by institutional investors. 22.9% of Newegg Commerce shares are held by insiders. Comparatively, 0.1% of Home Depot shares are held by insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company will outperform the market over the long term.

Analyst Recommendations

This is a breakdown of current recommendations and price targets for Newegg Commerce and Home Depot, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Newegg Commerce	1	0	0	0	1.00
Home Depot	1	13	18	0	2.53

Home Depot has a consensus price target of $373.18, suggesting a potential upside of 10.34%. Given Home Depot’s stronger consensus rating and higher probable upside, analysts plainly believe Home Depot is more favorable than Newegg Commerce.

Valuation & Earnings

This table compares Newegg Commerce and Home Depot”s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Newegg Commerce	$1.44 million	493.99	-$4.88 million	N/A	N/A
Home Depot	$164.68 billion	2.05	$14.16 billion	$14.08	24.02

Home Depot has higher revenue and earnings than Newegg Commerce.

Profitability

This table compares Newegg Commerce and Home Depot’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Newegg Commerce	N/A	N/A	N/A
Home Depot	8.41%	117.24%	13.83%

Risk & Volatility

Newegg Commerce has a beta of 3.44, suggesting that its share price is 244% more volatile than the S&P 500. Comparatively, Home Depot has a beta of 0.95, suggesting that its share price is 5% less volatile than the S&P 500.

Summary

Home Depot beats Newegg Commerce on 9 of the 12 factors compared between the two stocks.

About Newegg Commerce

Newegg Commerce, Inc. operates as an electronics-focused e-retailer in North America. The company offers desktops, laptops, gaming laptops, peripherals, and accessories; CPU/processors, graphic cards, motherboards, storage devices, and computer accessories; home video and audio, headphones, pro audio/video, cellphones, wearables, and digital cameras; display and printing, office technology furniture, office supplies, and mailing and inventory supplies; and software, digital downloads, warranty and services, 3rd party gift cards, and entertainment products. It also provides Xbox, PlayStation, home networking, server and components, smart home products, car electronics, motorcycles and ATV, wheels and tires, home improvement tools, home appliances, kitchen utensils, outdoor and garden furniture, fitness, and sports and health products. The company operates B2C platforms, including Newegg.com, Newegg.ca, and Newegg Global, as well as mobile apps; and B2B platforms comprising NeweggBusiness.com. The company was founded in 2001 and is headquartered in City of Industry, California. Newegg Commerce, Inc. is a subsidiary of Hangzhou Liaison Interactive Information Technology Co., Ltd.

About Home Depot

The Home Depot, Inc. operates as a home improvement retailer in the United States and internationally. It sells various building materials, home improvement products, lawn and garden products, and décor products, as well as facilities maintenance, repair, and operations products. The company also offers installation services for flooring, water heaters, bath, garage doors, cabinets, cabinet makeovers, countertops, sheds, furnaces and central air systems, and windows. In addition, it provides tool and equipment rental services. The company primarily serves homeowners; and professional renovators/remodelers, general contractors, maintenance professionals, handymen, property managers, and building service contractors, as well as specialty tradesmen, such as electricians, plumbers, and painters. It sells its products through websites, including homedepot.com; homedepot.ca and homedepot.com.mx; blinds.com, justblinds.com, and americanblinds.com for custom window coverings; thecompanystore.com, an online site for textiles and décor products; hdsupply.com for maintenance, repair, and operations (MRO) products and related services; and The Home Depot stores. The Home Depot, Inc. was incorporated in 1978 and is headquartered in Atlanta, Georgia.