Analyzing Krispy Kreme (NASDAQ:DNUT) & Grove Collaborative (NYSE:GROV)

Krispy Kreme (NASDAQ:DNUT) and Grove Collaborative (NYSE:GROV) are both small-cap consumer staples companies, but which is the better investment? We will compare the two companies based on the strength of their analyst recommendations, valuation, profitability, dividends, earnings, institutional ownership and risk.

Earnings & Valuation

This table compares Krispy Kreme and Grove Collaborative”s gross revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Krispy Kreme	$1.67 billion	0.31	$3.10 million	($2.99)	-1.01
Grove Collaborative	$203.43 million	0.30	-$27.42 million	($0.62)	-2.39

Krispy Kreme has higher revenue and earnings than Grove Collaborative. Grove Collaborative is trading at a lower price-to-earnings ratio than Krispy Kreme, indicating that it is currently the more affordable of the two stocks.

Profitability

This table compares Krispy Kreme and Grove Collaborative’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Krispy Kreme	-33.27%	-5.13%	-1.67%
Grove Collaborative	-12.59%	N/A	-30.45%

Institutional and Insider Ownership

81.7% of Krispy Kreme shares are owned by institutional investors. Comparatively, 91.6% of Grove Collaborative shares are owned by institutional investors. 3.0% of Krispy Kreme shares are owned by company insiders. Comparatively, 29.4% of Grove Collaborative shares are owned by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a company is poised for long-term growth.

Analyst Recommendations

This is a breakdown of current ratings for Krispy Kreme and Grove Collaborative, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Krispy Kreme	3	5	3	0	2.00
Grove Collaborative	1	1	1	0	2.00

Krispy Kreme presently has a consensus target price of $5.59, indicating a potential upside of 84.96%. Grove Collaborative has a consensus target price of $1.60, indicating a potential upside of 8.11%. Given Krispy Kreme’s higher probable upside, equities research analysts plainly believe Krispy Kreme is more favorable than Grove Collaborative.

Volatility & Risk

Krispy Kreme has a beta of 1.31, suggesting that its stock price is 31% more volatile than the S&P 500. Comparatively, Grove Collaborative has a beta of 1.22, suggesting that its stock price is 22% more volatile than the S&P 500.

Summary

Krispy Kreme beats Grove Collaborative on 8 of the 13 factors compared between the two stocks.

About Krispy Kreme

Krispy Kreme, Inc., together with its subsidiaries, produces doughnuts in the United States, the United Kingdom, Ireland, Australia, New Zealand, Mexico, Canada, Japan, and internationally. The company operates through three segments: U.S., International, and Market Development. The company offers doughnut experiences through hot light theater and fresh shops, delivered fresh daily branded cabinets and merchandising units within grocery and convenience stores, quick service restaurants, club memberships, drug stores, and ecommerce, as well as through its branded sweet treat line comprising Krispy Kreme branded sweet treats. It also provides cookies under the Insomnia Cookies brand, cookie cakes, ice cream, cookie-wiches, and brownies; and operates Krispy Kreme company-owned shops and franchise shops. The company was formerly known as Krispy Kreme Doughnuts, Inc. and changed its name to Krispy Kreme, Inc. in May 2021. Krispy Kreme, Inc. was founded in 1937 and is based in Charlotte, North Carolina.

About Grove Collaborative

Grove Collaborative Holdings, Inc. operates as a plastic neutral consumer products retailer in the United States. It offers household, personal care, beauty, and other consumer products through retail channels, third parties, direct-to-consumer platform, and mobile applications, as well as online store. The company is headquartered in San Francisco, California.