Critical Comparison: Big 5 Sporting Goods (NASDAQ:BGFV) & Arhaus (NASDAQ:ARHS)

Big 5 Sporting Goods (NASDAQ:BGFV) and Arhaus (NASDAQ:ARHS) are both small-cap retail/wholesale companies, but which is the better business? We will contrast the two businesses based on the strength of their profitability, risk, dividends, earnings, institutional ownership, analyst recommendations and valuation.

Earnings & Valuation

This table compares Big 5 Sporting Goods and Arhaus”s gross revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Big 5 Sporting Goods	$795.47 million	0.04	-$69.07 million	($4.20)	-0.34
Arhaus	$1.27 billion	1.25	$68.55 million	$0.50	22.58

Arhaus has higher revenue and earnings than Big 5 Sporting Goods. Big 5 Sporting Goods is trading at a lower price-to-earnings ratio than Arhaus, indicating that it is currently the more affordable of the two stocks.

Profitability

This table compares Big 5 Sporting Goods and Arhaus’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Big 5 Sporting Goods	-12.14%	-39.67%	-10.70%
Arhaus	5.33%	20.08%	5.62%

Insider & Institutional Ownership

42.0% of Big 5 Sporting Goods shares are held by institutional investors. Comparatively, 27.9% of Arhaus shares are held by institutional investors. 6.7% of Big 5 Sporting Goods shares are held by insiders. Comparatively, 1.5% of Arhaus shares are held by insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company will outperform the market over the long term.

Volatility & Risk

Big 5 Sporting Goods has a beta of 1.45, indicating that its stock price is 45% more volatile than the S&P 500. Comparatively, Arhaus has a beta of 2.59, indicating that its stock price is 159% more volatile than the S&P 500.

Analyst Ratings

This is a summary of current recommendations and price targets for Big 5 Sporting Goods and Arhaus, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Big 5 Sporting Goods	0	0	0	0	0.00
Arhaus	0	13	4	0	2.24

Arhaus has a consensus target price of $10.92, suggesting a potential downside of 3.25%. Given Arhaus’ stronger consensus rating and higher possible upside, analysts plainly believe Arhaus is more favorable than Big 5 Sporting Goods.

Summary

Arhaus beats Big 5 Sporting Goods on 12 of the 14 factors compared between the two stocks.

About Big 5 Sporting Goods

Big 5 Sporting Goods Corporation operates as a sporting goods retailer in the western United States. Its products include athletic shoes, apparel, and accessories. The company also offers a selection of outdoor and athletic equipment for team sports, fitness, camping, hunting, fishing, tennis, golf, and winter and summer recreation, as well as home recreation. It also provides private label items, such as shoes, apparel, camping equipment, fishing supplies, and snow sport equipment. The company sells private label merchandise under its trademarks comprising Golden Bear, Harsh, Pacifica, and Rugged Exposure. It also operates an e-commerce platform under the Big 5 Sporting Goods name. Big 5 Sporting Goods Corporation was founded in 1955 and is headquartered in El Segundo, California.

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.