Aterian (NASDAQ:ATER) versus KB Home (NYSE:KBH) Head to Head Review

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

Profitability

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

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

Volatility & Risk

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

Analyst Recommendations

This is a summary of recent ratings and target prices for KB Home and Aterian, as reported by MarketBeat.

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

KB Home presently has a consensus target price of $60.00, suggesting a potential upside of 22.17%. Given KB Home’s stronger consensus rating and higher probable upside, analysts plainly believe KB Home is more favorable than Aterian.

Earnings and Valuation

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

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
KB Home	$6.24 billion	0.48	$428.79 million	$2.87	17.11
Aterian	$68.97 million	0.12	-$18.98 million	($1.99)	-0.39

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.

Institutional & Insider Ownership

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

Summary

KB Home beats Aterian on 13 of the 14 factors compared between the two stocks.

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.

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.