Head-To-Head Survey: Aterian (NASDAQ:ATER) versus Smith Douglas Homes (NYSE:SDHC)

Aterian (NASDAQ:ATER) and Smith Douglas Homes (NYSE:SDHC) are both small-cap consumer discretionary companies, but which is the better stock? We will compare the two businesses based on the strength of their analyst recommendations, profitability, earnings, risk, institutional ownership, dividends and valuation.

Analyst Ratings

This is a summary of current ratings for Aterian and Smith Douglas Homes, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Aterian	1	0	0	0	1.00
Smith Douglas Homes	1	7	1	0	2.00

Smith Douglas Homes has a consensus price target of $11.38, indicating a potential upside of 11.41%. Given Smith Douglas Homes’ stronger consensus rating and higher possible upside, analysts clearly believe Smith Douglas Homes is more favorable than Aterian.

Profitability

This table compares Aterian and Smith Douglas Homes’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Aterian	-49.30%	-92.04%	-47.83%
Smith Douglas Homes	0.64%	-0.19%	-0.14%

Risk and Volatility

Aterian has a beta of 1.37, indicating that its share price is 37% more volatile than the S&P 500. Comparatively, Smith Douglas Homes has a beta of 0.87, indicating that its share price is 13% less volatile than the S&P 500.

Insider & Institutional Ownership

7.0% of Aterian shares are owned by institutional investors. 19.5% of Aterian shares are owned by company insiders. Comparatively, 84.2% of Smith Douglas Homes shares are owned by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company is poised for long-term growth.

Earnings and Valuation

This table compares Aterian and Smith Douglas Homes”s top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Aterian	$68.97 million	0.12	-$18.98 million	($1.99)	-0.41
Smith Douglas Homes	$971.12 million	0.53	$10.69 million	$0.72	14.18

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

Summary

Smith Douglas Homes beats Aterian on 11 of the 13 factors compared between the two stocks.

About Aterian

Aterian, Inc., together with its subsidiaries, operates as a technology-enabled consumer products company in North America and internationally. Its platform offers home and kitchen appliances; kitchenware; cooling and air quality appliances, such as dehumidifiers; health and beauty products; and essential oils under the Squatty Potty, hOmeLabs, Mueller, Pursteam, Healing Solutions, and Photo Paper Direct brand names. The company primarily serves individual online consumers through online retail channels, such as Amazon and Walmart, as well as through its owned and operated websites and other marketplaces. The company was formerly known as Mohawk Group Holdings, Inc. and changed its name to Aterian, Inc. in April 2021. Aterian, Inc. was founded in 2014 and is headquartered in Summit, New Jersey.

About Smith Douglas Homes

Smith Douglas Homes Corp., together with its subsidiaries, engages in the design, construction, and sale of single-family homes in the southeastern United States. It also provides closing, escrow, and title insurance services. The company sells its products to entry-level and empty-nest homebuyers. Smith Douglas Homes Corp. was founded in 2008 and is headquartered in Woodstock, Georgia.