Critical Survey: Pono Capital (NASDAQ:PONO) versus Embraer (NYSE:ERJ)

Pono Capital (NASDAQ:PONO – Get Rating) and Embraer (NYSE:ERJ – Get Rating) are both business services companies, but which is the superior business? We will compare the two businesses based on the strength of their risk, institutional ownership, earnings, dividends, valuation, profitability and analyst recommendations.

Analyst Ratings

This is a breakdown of recent recommendations for Pono Capital and Embraer, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Pono Capital	0	0	0	0	N/A
Embraer	0	1	4	0	2.80

Embraer has a consensus target price of $16.85, suggesting a potential upside of 10.56%. Given Embraer’s higher possible upside, analysts plainly believe Embraer is more favorable than Pono Capital.

Insider and Institutional Ownership

74.1% of Pono Capital shares are held by institutional investors. Comparatively, 37.9% of Embraer shares are held by institutional investors. 1.0% of Embraer shares are held by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock will outperform the market over the long term.

Valuation and Earnings

This table compares Pono Capital and Embraer’s top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Pono Capital	N/A	N/A	$4.59 million	N/A	N/A
Embraer	$4.54 billion	0.62	-$185.40 million	$0.19	80.21

Pono Capital has higher earnings, but lower revenue than Embraer.

Risk & Volatility

Pono Capital has a beta of 0.07, meaning that its stock price is 93% less volatile than the S&P 500. Comparatively, Embraer has a beta of 1.24, meaning that its stock price is 24% more volatile than the S&P 500.

Profitability

This table compares Pono Capital and Embraer’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Pono Capital	N/A	N/A	N/A
Embraer	0.78%	1.02%	0.29%

Summary

Embraer beats Pono Capital on 8 of the 10 factors compared between the two stocks.

About Pono Capital

(Get Rating)

Pono Capital Corp. focuses on effecting a merger, capital stock exchange, asset acquisition, stock purchase, reorganization, or similar business combination with one or more businesses. It intends to identify business opportunities in the field of enterprise security and operations applications, cloud-based content and digital streaming services, drone technology and service, artificial intelligence, consumer healthcare and wellness, biomedical technology, entertainment/gaming, distance learning, and online retail and e-sports. The company was incorporated in 2021 and is based in Honolulu, Hawaii.

About Embraer

(Get Rating)

Embraer SA engages in the design, manufacture, and sale of aircraft and its parts for commercial, defense, and executive aviation sectors. It operates through the following segments: Commercial Aviation, Defense and Security, Executive Jet Business, Service & Support and Others. The Commercial Aviation segment is involved in the development, production, and sale of commercial jets; and the provision of support services to regional aviation and aircraft leasing. The Defense and Security segment engages in research, development, production, modification, and support for defense and security aircrafts, as well as other integrated products and solutions including satellites and information and communication systems. The Executive Jet Business segment deals with the development, manufacture, and sale of executive jets. The Service & Support segment provides after-service solutions and support to its customers through a comprehensive portfolio of innovative and competitive solutions to ensure operational efficiency of products manufactured by Embraer and by other aircraft manufacturers, extending the useful life of commercial, executive and defense aircraft. The Others segment refers to