Reviewing LGI Homes (NASDAQ:LGIH) and Koss (NASDAQ:KOSS)

Koss (NASDAQ:KOSS) and LGI Homes (NASDAQ:LGIH) are both small-cap consumer discretionary companies, but which is the better stock? We will compare the two companies based on the strength of their risk, analyst recommendations, dividends, institutional ownership, earnings, valuation and profitability.

Institutional & Insider Ownership

6.2% of Koss shares are owned by institutional investors. Comparatively, 84.9% of LGI Homes shares are owned by institutional investors. 44.1% of Koss shares are owned by insiders. Comparatively, 12.6% of LGI Homes shares are owned by insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company is poised for long-term growth.

Profitability

This table compares Koss and LGI Homes’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Koss	-7.22%	-2.90%	-2.39%
LGI Homes	4.05%	3.75%	2.02%

Volatility and Risk

Koss has a beta of 1.7, meaning that its stock price is 70% more volatile than the S&P 500. Comparatively, LGI Homes has a beta of 1.88, meaning that its stock price is 88% more volatile than the S&P 500.

Analyst Ratings

This is a breakdown of recent ratings for Koss and LGI Homes, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Koss	1	0	0	0	1.00
LGI Homes	2	1	2	0	2.00

LGI Homes has a consensus target price of $68.00, suggesting a potential upside of 54.76%. Given LGI Homes’ stronger consensus rating and higher possible upside, analysts plainly believe LGI Homes is more favorable than Koss.

Valuation & Earnings

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

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Koss	$12.04 million	2.55	-$390,000.00	($0.09)	-36.11
LGI Homes	$1.72 billion	0.59	$72.55 million	$3.05	14.41

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

Summary

LGI Homes beats Koss on 12 of the 14 factors compared between the two stocks.

About Koss

Koss Corporation (NASDAQ: KOSS) is an American audio equipment company headquartered in Milwaukee, Wisconsin. The company designs, manufactures and sells headphones and related personal audio products for consumers and professional users. Koss’s product portfolio includes wired stereo headphones, wireless and Bluetooth headphones, true wireless earbuds, communication headsets and accessories. Its products are sold through retailers, distributors and online channels under the Koss brand. The company was founded in 1953 by John C. Koss and introduced one of the first high-fidelity stereo headphones, the SP/3, in 1958.

About LGI Homes

LGI Homes, Inc. is a residential homebuilder headquartered in The Woodlands, Texas. Founded in 2003, the company develops and sells newly built homes, including single-family houses and townhomes, in planned communities. Its homes are marketed to a range of buyers, including first-time buyers and households seeking larger homes. The company operates under the LGI Homes and Terrata Homes brands, offering homes across markets in multiple U.S. states. Its communities feature a variety of home designs and locations, with offerings that vary by market.