Contrasting High Tide (NASDAQ:HITI) & Leslie’s (NASDAQ:LESL)

Leslie’s (NASDAQ:LESL) and High Tide (NASDAQ:HITI) are both small-cap consumer discretionary companies, but which is the better investment? We will compare the two businesses based on the strength of their analyst recommendations, valuation, earnings, profitability, institutional ownership, risk and dividends.

Analyst Recommendations

This is a summary of recent recommendations and price targets for Leslie’s and High Tide, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Leslie’s	2	4	1	0	1.86
High Tide	1	0	3	0	2.50

Leslie’s presently has a consensus target price of $2.85, suggesting a potential upside of 2,694.12%. High Tide has a consensus target price of $5.62, suggesting a potential upside of 113.88%. Given Leslie’s’ higher possible upside, analysts plainly believe Leslie’s is more favorable than High Tide.

Institutional & Insider Ownership

4.5% of High Tide shares are owned by institutional investors. 0.5% of Leslie’s shares are owned by insiders. Comparatively, 12.4% of High Tide 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 Leslie’s and High Tide’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Leslie’s	-21.24%	N/A	-8.96%
High Tide	-4.73%	5.13%	1.55%

Volatility & Risk

Leslie’s has a beta of 1.76, indicating that its share price is 76% more volatile than the S&P 500. Comparatively, High Tide has a beta of 0.65, indicating that its share price is 35% less volatile than the S&P 500.

Earnings and Valuation

This table compares Leslie’s and High Tide”s revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Leslie’s	$1.18 billion	0.00	-$236.97 million	($27.08)	-0.00
High Tide	$425.10 million	0.55	-$36.23 million	($0.23)	-11.43

High Tide has lower revenue, but higher earnings than Leslie’s. High Tide is trading at a lower price-to-earnings ratio than Leslie’s, indicating that it is currently the more affordable of the two stocks.

Summary

High Tide beats Leslie’s on 10 of the 14 factors compared between the two stocks.

About Leslie’s

Leslie’s, Inc. operates as a direct-to-consumer pool and spa care brand in the United States. The company markets and sells pool and spa supplies and related products and services. It also offers various pool and spa maintenance items, such as chemicals, equipment and parts, cleaning and maintenance equipment, safety, recreational, and fitness related products. In addition, the company provides installation and repair services for pool and spa equipment. It also sells its products through e-commerce websites and third-party marketplaces. The company offers complimentary, commercial-grade in-store, water testing, and analysis services. It serves the residential, professional, and commercial consumers. Leslie’s, Inc. was founded in 1963 and is based in Phoenix, Arizona.

About High Tide

High Tide Inc. engages in the cannabis retail business in Canada, the United States, and internationally. The company operates through Retail and Wholesale segments. It operates licensed retail cannabis stores; and provides data analytics services. In addition, the company manufactures and distributes consumption accessories. Further, it sells its products through online sales via e-commerce platform. The company offers its products under the Daily High Club, DankStop, FABCBD, GC, Nuleaf, Smoke Cartel, and Blessed CBD brands. The company was formerly known as High Tide Ventures Inc. and changed its name to High Tide Inc. in October 2018. High Tide Inc. was founded in 2009 and is headquartered in Calgary, Canada.