Contrasting Latham Group (NASDAQ:SWIM) and Karat Packaging (NASDAQ:KRT)

Latham Group (NASDAQ:SWIMGet Rating) and Karat Packaging (NASDAQ:KRTGet Rating) are both small-cap construction companies, but which is the better investment? We will compare the two companies based on the strength of their institutional ownership, earnings, valuation, dividends, profitability, risk and analyst recommendations.

Valuation and Earnings

This table compares Latham Group and Karat Packaging’s revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Latham Group $630.46 million 2.15 -$62.35 million ($0.56) -20.21
Karat Packaging $364.24 million 1.03 $20.78 million $1.09 17.45

Karat Packaging has lower revenue, but higher earnings than Latham Group. Latham Group is trading at a lower price-to-earnings ratio than Karat Packaging, indicating that it is currently the more affordable of the two stocks.

Profitability

This table compares Latham Group and Karat Packaging’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Latham Group -9.89% 5.07% 1.95%
Karat Packaging 5.70% 19.79% 10.45%

Institutional and Insider Ownership

24.7% of Latham Group shares are owned by institutional investors. Comparatively, 19.7% of Karat Packaging shares are owned by institutional investors. 7.6% of Latham Group 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.

Analyst Recommendations

This is a summary of current recommendations for Latham Group and Karat Packaging, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Latham Group 0 2 7 0 2.78
Karat Packaging 0 0 2 0 3.00

Latham Group currently has a consensus price target of $21.00, suggesting a potential upside of 85.51%. Karat Packaging has a consensus price target of $31.00, suggesting a potential upside of 62.99%. Given Latham Group’s higher probable upside, analysts plainly believe Latham Group is more favorable than Karat Packaging.

Summary

Karat Packaging beats Latham Group on 7 of the 13 factors compared between the two stocks.

Latham Group Company Profile (Get Rating)

Latham Group, Inc. designs, manufactures, and markets in-ground residential swimming pools in North America, Australia, and New Zealand. It offers a portfolio of pools and related products, including in-ground swimming pools, pool covers, and pool liners. The company was formerly known as Latham Topco, Inc. and changed its name to Latham Group, Inc. in March 2021. Latham Group, Inc. was incorporated in 2018 and is headquartered in Latham, New York.

Karat Packaging Company Profile (Get Rating)

Karat Packaging Inc. manufactures and distributes single-use disposable products in plastic, paper, biopolymer-based, and other compostable forms used in various restaurant and foodservice settings. It provides food and take-out containers, bags, tableware, cups, lids, cutlery, straws, specialty beverage ingredients, equipment, gloves, and other products under the Karat Earth brand. The company offers its products to domestic and regional distributors, restaurant chains, retail establishments, and online customers. It also provides new product development, design, printing, and logistics services. Karat Packaging Inc. was founded in 2000 and is based in Chino, California.

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