Head-To-Head Survey: Cricut (NASDAQ:CRCT) & Purple Innovation (NASDAQ:PRPL)

Purple Innovation (NASDAQ:PRPL) and Cricut (NASDAQ:CRCT) are both small-cap consumer discretionary companies, but which is the better stock? We will compare the two businesses based on the strength of their institutional ownership, analyst recommendations, profitability, earnings, valuation, risk and dividends.

Earnings and Valuation

This table compares Purple Innovation and Cricut”s revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Purple Innovation	$468.73 million	0.05	-$51.41 million	($11.24)	-0.52
Cricut	$708.78 million	1.62	$76.71 million	$0.43	12.74

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

Analyst Recommendations

This is a breakdown of recent ratings and target prices for Purple Innovation and Cricut, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Purple Innovation	1	2	0	0	1.67
Cricut	4	1	0	1	1.67

Purple Innovation currently has a consensus target price of $16.25, indicating a potential upside of 180.66%. Cricut has a consensus target price of $3.82, indicating a potential downside of 30.35%. Given Purple Innovation’s higher probable upside, research analysts plainly believe Purple Innovation is more favorable than Cricut.

Institutional and Insider Ownership

88.4% of Purple Innovation shares are owned by institutional investors. Comparatively, 19.6% of Cricut shares are owned by institutional investors. 54.0% of Purple Innovation shares are owned by insiders. Comparatively, 16.5% of Cricut shares are owned by insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock will outperform the market over the long term.

Profitability

This table compares Purple Innovation and Cricut’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Purple Innovation	-10.74%	N/A	-10.89%
Cricut	12.71%	24.57%	15.42%

Risk & Volatility

Purple Innovation has a beta of 1.46, indicating that its share price is 46% more volatile than the S&P 500. Comparatively, Cricut has a beta of 0.19, indicating that its share price is 81% less volatile than the S&P 500.

Summary

Cricut beats Purple Innovation on 8 of the 12 factors compared between the two stocks.

About Purple Innovation

Purple Innovation, Inc. designs and manufactures sleep and other products in the United States and internationally. The company offers mattresses, pillows, cushions, bases, sheets, platforms, adjustable bases, mattress protectors, foundations, blankets, duvets, duvet covers, seat cushions, and pet beds under the Purple brand. It markets and sells its products through its e-commerce online channels, retail brick-and-mortar wholesale partners, third-party online retailers, and Purple showrooms, as well as through its website, Purple.com. The company was founded in 2010 and is headquartered in Lehi, Utah.

About Cricut

Cricut, Inc. engages in the design, marketing, and distribution of a creativity platform that enables users to turn ideas into professional-looking handmade goods. It operates through three segments: Connected Machines, Subscriptions, and Accessories and Materials. The company offers connected machines, design apps, and accessories and materials for users to create personalized birthday cards, mugs, T-shirts, and large-scale interior decorations. Its connected machines include Cricut Joy family for personalization, organization, and customization; Cricut Explore family for cutting, writing, and scoring; Cricut Maker family for cutting, writing, scoring, and adding decorative effects to various materials, such as paper, vinyl, iron-on vinyl, pens, and others; and Cricut Venture for cutting, writing, and scoring large-format projects at professional speeds. The company also provides Cricut Access and Cricut Access Premium subscription offerings, and in-app purchases; and a software that integrates its connected machines and design apps comprising Cricut Joy App, Design Space, and other design apps. In addition, it offers a range of accessories and materials, such as Cricut EasyPress, Cricut Mug Press, hand tools, machine replacement tools and blades, and project materials. The company offers its products through its third-party brick-and-mortar and online retail partners; and its website cricut.com, as well as through a network of distributors. It operates in the United States, Canada, the United Kingdom, Ireland, Australia, New Zealand, and Western Europe, as well as the Middle East, Latin America, South Africa, and Asia. The company was formerly known as Provo Craft & Novelty, Inc. and changed its name to Cricut, Inc. in March 2018. The company was incorporated in 1969 and is headquartered in South Jordan, Utah.