Contrasting KB Home (NYSE:KBH) & Aterian (NASDAQ:ATER)

Aterian (NASDAQ:ATER) and KB Home (NYSE:KBH) are both consumer discretionary companies, but which is the superior investment? We will contrast the two businesses based on the strength of their risk, valuation, institutional ownership, earnings, dividends, analyst recommendations and profitability.

Risk and Volatility

Aterian has a beta of 0.83, indicating that its stock price is 17% less volatile than the S&P 500. Comparatively, KB Home has a beta of 1.34, indicating that its stock price is 34% more volatile than the S&P 500.

Analyst Ratings

This is a summary of recent recommendations for Aterian and KB Home, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Aterian	1	0	0	0	1.00
KB Home	1	10	4	0	2.20

KB Home has a consensus price target of $59.92, indicating a potential upside of 23.38%. Given KB Home’s stronger consensus rating and higher probable upside, analysts clearly believe KB Home is more favorable than Aterian.

Insider & Institutional Ownership

7.0% of Aterian shares are held by institutional investors. Comparatively, 96.1% of KB Home shares are held by institutional investors. 19.5% of Aterian shares are held by insiders. Comparatively, 4.7% of KB Home shares are held by insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a company will outperform the market over the long term.

Profitability

This table compares Aterian and KB Home’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Aterian	-49.30%	-92.04%	-47.83%
KB Home	4.94%	7.67%	4.37%

Earnings & Valuation

This table compares Aterian and KB Home”s revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Aterian	$68.85 million	0.11	-$18.98 million	($1.99)	-0.35
KB Home	$6.24 billion	0.48	$428.79 million	$2.87	16.92

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

Summary

KB Home beats Aterian on 13 of the 14 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 KB Home

KB Home operates as a homebuilding company in the United States. It operates through four segments: West Coast, Southwest, Central, and Southeast. It builds and sells various homes, including attached and detached single-family residential homes, townhomes, and condominiums primarily for first-time, first move-up, second move-up, and active adult homebuyers. The company also provides financial services, such as insurance products and title services, as well as mortgage banking services, including residential consumer mortgage loans to homebuyers. It has operations in Arizona, California, Colorado, Florida, Idaho, Nevada, North Carolina, Texas, and Washington. The company was formerly known as Kaufman and Broad Home Corporation and changed its name to KB Home in January 2001. KB Home was founded in 1957 and is based in Los Angeles, California.