Head to Head Contrast: Universal Electronics (NASDAQ:UEIC) and Aterian (NASDAQ:ATER)

Aterian (NASDAQ:ATER) and Universal Electronics (NASDAQ:UEIC) are both small-cap consumer discretionary companies, but which is the superior stock? We will compare the two businesses based on the strength of their valuation, institutional ownership, analyst recommendations, profitability, dividends, risk and earnings.

Analyst Recommendations

This is a breakdown of current ratings and price targets for Aterian and Universal Electronics, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Aterian	1	0	0	0	1.00
Universal Electronics	1	3	0	0	1.75

Universal Electronics has a consensus target price of $4.25, suggesting a potential downside of 19.58%. Given Universal Electronics’ stronger consensus rating and higher probable upside, analysts clearly believe Universal Electronics is more favorable than Aterian.

Earnings and Valuation

This table compares Aterian and Universal Electronics”s revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Aterian	$68.97 million	0.10	-$18.98 million	($1.99)	-0.34
Universal Electronics	$368.29 million	0.18	-$18.60 million	($1.16)	-4.56

Universal Electronics has higher revenue and earnings than Aterian. Universal Electronics is trading at a lower price-to-earnings ratio than Aterian, indicating that it is currently the more affordable of the two stocks.

Profitability

This table compares Aterian and Universal Electronics’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Aterian	-49.30%	-92.04%	-47.83%
Universal Electronics	-4.57%	2.70%	1.44%

Volatility and Risk

Aterian has a beta of 1.2, indicating that its share price is 20% more volatile than the S&P 500. Comparatively, Universal Electronics has a beta of 1.19, indicating that its share price is 19% more volatile than the S&P 500.

Insider and Institutional Ownership

7.0% of Aterian shares are held by institutional investors. Comparatively, 79.3% of Universal Electronics shares are held by institutional investors. 19.5% of Aterian shares are held by insiders. Comparatively, 17.1% of Universal Electronics shares are held by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock will outperform the market over the long term.

Summary

Universal Electronics beats Aterian on 10 of the 13 factors compared between the two stocks.

About Aterian

Aterian, Inc., together with its subsidiaries, operates as a technology-enabled consumer products company in North America and internationally. Its platform offers home and kitchen appliances; kitchenware; cooling and air quality appliances, such as dehumidifiers; health and beauty products; and essential oils under the Squatty Potty, hOmeLabs, Mueller, Pursteam, Healing Solutions, and Photo Paper Direct brand names. The company primarily serves individual online consumers through online retail channels, such as Amazon and Walmart, as well as through its owned and operated websites and other marketplaces. The company was formerly known as Mohawk Group Holdings, Inc. and changed its name to Aterian, Inc. in April 2021. Aterian, Inc. was founded in 2014 and is headquartered in Summit, New Jersey.

About Universal Electronics

Universal Electronics Inc. designs, develops, manufactures, ships, and supports control and sensor technology solutions in the United States, the People’s Republic of China, rest of Asia, Europe, Latin America, and internationally. The company offers voice-enabled automatically-programmed universal two-way radio frequency, as well as infrared remote controls to video service providers, original equipment manufacturers (OEMs), retailers, and private label customers; wall-mount and handheld thermostat controllers and connected accessories for smart energy management systems to OEM customers, hotels, hospitality, and system integrators; proprietary and standards-based RF sensors for residential security, safety, and home automation applications; and integrated circuits on which its software and universal device control database is embedded to OEMs, video service providers, and private label customers. It also provides software, firmware and technology solutions that can enable devices such as Smart TVs, hybrid set-top boxes, audio systems, smart speakers, game consoles, and other consumer electronic and smart home devices to wirelessly connect and interoperate within home networks; cloud-services that support its embedded software and hardware solutions; intellectual property that the company licenses to OEMs and video service providers; embedded and cloud-enabled software for firmware update provisioning and digital rights management validation services to consumer electronics brands; and AV accessories, including universal remote controls, television wall mounts and stands, and digital television antennas. In addition, the company QuickSet, a software application that can be embedded in entertainment or smart home platform or can be delivered as a cloud-based service, through QuickSet Cloud, to enable universal device setup, interoperability, and control. Universal Electronics Inc. was incorporated in 1986 and is based in Scottsdale, Arizona.