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

Volatility and Risk

Nova Lifestyle has a beta of 1.85, indicating that its share price is 85% more volatile than the S&P 500. Comparatively, Purple Innovation has a beta of -1.37, indicating that its share price is 237% less volatile than the S&P 500.

Profitability

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

Net Margins Return on Equity Return on Assets
Nova Lifestyle 4.03% 10.29% 8.77%
Purple Innovation N/A 19.73% 1.82%

Analyst Recommendations

This is a breakdown of current ratings and recommmendations for Nova Lifestyle and Purple Innovation, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Nova Lifestyle 0 0 0 0 N/A
Purple Innovation 0 0 1 0 3.00

Purple Innovation has a consensus target price of $6.50, suggesting a potential downside of 8.96%. Given Purple Innovation’s higher possible upside, analysts clearly believe Purple Innovation is more favorable than Nova Lifestyle.

Earnings and Valuation

This table compares Nova Lifestyle and Purple Innovation’s revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Nova Lifestyle $106.49 million 0.25 $3.76 million N/A N/A
Purple Innovation N/A N/A $800,000.00 N/A N/A

Nova Lifestyle has higher revenue and earnings than Purple Innovation.

Insider & Institutional Ownership

3.6% of Nova Lifestyle shares are owned by institutional investors. Comparatively, 12.8% of Purple Innovation shares are owned by institutional investors. 38.9% of Nova Lifestyle shares are owned by insiders. Comparatively, 65.8% of Purple Innovation shares are owned by insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock will outperform the market over the long term.

About Nova Lifestyle

Nova LifeStyle, Inc., together with its subsidiaries, designs, manufactures, markets, and sells residential and commercial furniture for middle and upper middle-income consumers worldwide. The company offers upholstered, wood, and metal-based residential furniture for the living rooms, dining rooms, bedrooms, and home offices. Its products include sofas, chairs, dining tables, beds, entertainment consoles, cabinets, and cupboards. The company offers its products under the Diamond Sofa, Colorful World, Giorgio Mobili, and Bright Swallow brands. It sells its products through Internet sales and direct sales primarily to furniture distributors and retailers. Nova LifeStyle, Inc. was founded in 2003 and is headquartered in Commerce, California.

About Purple Innovation

Purple Innovation, Inc. designs and manufactures mattresses, pillows, and cushions. The company markets and sells its products through direct-to-consumer and retail channels. Purple Innovation, Inc. was founded in 2010 and is headquartered in Alpine, Utah.

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