Arhaus (NASDAQ:ARHS) vs. Build-A-Bear Workshop (NYSE:BBW) Head-To-Head Comparison

Arhaus (NASDAQ:ARHS) and Build-A-Bear Workshop (NYSE:BBW) are both small-cap retail/wholesale companies, but which is the better investment? We will contrast the two companies based on the strength of their earnings, dividends, risk, valuation, profitability, analyst recommendations and institutional ownership.

Valuation and Earnings

This table compares Arhaus and Build-A-Bear Workshop”s gross revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Arhaus	$1.27 billion	1.19	$68.55 million	$0.50	21.54
Build-A-Bear Workshop	$496.40 million	1.97	$51.78 million	$4.46	16.59

Arhaus has higher revenue and earnings than Build-A-Bear Workshop. Build-A-Bear Workshop is trading at a lower price-to-earnings ratio than Arhaus, indicating that it is currently the more affordable of the two stocks.

Analyst Recommendations

This is a summary of current ratings and target prices for Arhaus and Build-A-Bear Workshop, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Arhaus	0	12	4	0	2.25
Build-A-Bear Workshop	0	0	3	1	3.25

Arhaus presently has a consensus target price of $10.83, indicating a potential upside of 0.59%. Build-A-Bear Workshop has a consensus target price of $68.00, indicating a potential downside of 8.10%. Given Arhaus’ higher probable upside, research analysts clearly believe Arhaus is more favorable than Build-A-Bear Workshop.

Insider and Institutional Ownership

27.9% of Arhaus shares are held by institutional investors. Comparatively, 79.3% of Build-A-Bear Workshop shares are held by institutional investors. 1.5% of Arhaus shares are held by company insiders. Comparatively, 5.8% of Build-A-Bear Workshop shares are held by company insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock is poised for long-term growth.

Profitability

This table compares Arhaus and Build-A-Bear Workshop’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Arhaus	5.33%	20.08%	5.62%
Build-A-Bear Workshop	11.34%	42.37%	19.95%

Volatility and Risk

Arhaus has a beta of 2.59, suggesting that its stock price is 159% more volatile than the S&P 500. Comparatively, Build-A-Bear Workshop has a beta of 0.72, suggesting that its stock price is 28% less volatile than the S&P 500.

Summary

Build-A-Bear Workshop beats Arhaus on 9 of the 15 factors compared between the two stocks.

About Arhaus

Arhaus, Inc. operates as a lifestyle brand and premium retailer in the home furnishings market in the United States. It provides merchandise assortments across various categories, including furniture, lighting, textiles, décor, and outdoor. The company's furniture products comprise bedroom, dining room, living room, and home office furnishings, which includes sofas, dining tables and chairs, accent chairs, console and coffee tables, beds, headboards, dressers, desks, bookcases, modular storage, and other items; and outdoor products, such as outdoor dining tables, chairs, chaises and other furniture, lighting, textiles, décor, umbrellas, and fire pits. It offers lighting products, including various distinct and artistic lighting fixtures comprising chandeliers, pendants, table and floor lamps, and sconces; textile products, such as handcrafted indoor and outdoor rugs, bed linens, and pillows and throws; and décor products, including various wall art to mirrors, vases to candles, and other decorative accessories. The company distributes its products through an omni-channel model comprising showrooms, e-commerce platform, print and digital media, and in-home designer services. Arhaus, Inc. was founded in 1986 and is headquartered in Boston Heights, Ohio.

About Build-A-Bear Workshop

Build-A-Bear Workshop, Inc. operates as a multi-channel retailer of plush animals and related products in the United States, Canada, the United Kingdom, Ireland, and internationally. The company operates through three segments: Direct-to-Consumer, Commercial, and International Franchising. Its merchandise comprises various styles of plush products to be stuffed, pre-stuffed plush products, and sounds and scents that can be added to the stuffed animals, as well as range of clothing, shoes and accessories, and other toy and novelty items, including family sleepwear. The company operates its stores under the Build-A-Bear Workshop brand name; and sells its products through its e-commerce sites and third-party marketplace sites. Build-A-Bear Workshop, Inc. was founded in 1997 and is headquartered in Saint Louis, Missouri.