Purple Innovation (NASDAQ:PRPL) vs. Cricut (NASDAQ:CRCT) Financial Contrast

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

Institutional & Insider Ownership

19.6% of Cricut shares are held by institutional investors. Comparatively, 88.4% of Purple Innovation shares are held by institutional investors. 16.5% of Cricut shares are held by company insiders. Comparatively, 54.0% of Purple Innovation shares are held by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock will outperform the market over the long term.

Earnings & Valuation

This table compares Cricut and Purple Innovation”s gross revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Cricut	$708.78 million	1.69	$76.71 million	$0.43	13.27
Purple Innovation	$468.73 million	0.05	-$51.41 million	($11.24)	-0.45

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

Volatility and Risk

Cricut has a beta of 0.19, meaning that its share price is 81% less volatile than the S&P 500. Comparatively, Purple Innovation has a beta of 1.46, meaning that its share price is 46% more volatile than the S&P 500.

Analyst Ratings

This is a breakdown of current ratings for Cricut and Purple Innovation, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Cricut	4	1	0	1	1.67
Purple Innovation	1	2	0	0	1.67

Cricut currently has a consensus price target of $4.07, suggesting a potential downside of 28.72%. Purple Innovation has a consensus price target of $16.25, suggesting a potential upside of 224.09%. Given Purple Innovation’s higher possible upside, analysts clearly believe Purple Innovation is more favorable than Cricut.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
Cricut	12.71%	24.57%	15.42%
Purple Innovation	-10.74%	N/A	-10.89%

Summary

Cricut beats Purple Innovation on 9 of the 13 factors compared between the two stocks.

About Cricut

Cricut, Inc. engages in the design, marketing, and distribution of a creativity platform that enables users to turn ideas into professional-looking handmade goods. It operates through three segments: Connected Machines, Subscriptions, and Accessories and Materials. The company offers connected machines, design apps, and accessories and materials for users to create personalized birthday cards, mugs, T-shirts, and large-scale interior decorations. Its connected machines include Cricut Joy family for personalization, organization, and customization; Cricut Explore family for cutting, writing, and scoring; Cricut Maker family for cutting, writing, scoring, and adding decorative effects to various materials, such as paper, vinyl, iron-on vinyl, pens, and others; and Cricut Venture for cutting, writing, and scoring large-format projects at professional speeds. The company also provides Cricut Access and Cricut Access Premium subscription offerings, and in-app purchases; and a software that integrates its connected machines and design apps comprising Cricut Joy App, Design Space, and other design apps. In addition, it offers a range of accessories and materials, such as Cricut EasyPress, Cricut Mug Press, hand tools, machine replacement tools and blades, and project materials. The company offers its products through its third-party brick-and-mortar and online retail partners; and its website cricut.com, as well as through a network of distributors. It operates in the United States, Canada, the United Kingdom, Ireland, Australia, New Zealand, and Western Europe, as well as the Middle East, Latin America, South Africa, and Asia. The company was formerly known as Provo Craft & Novelty, Inc. and changed its name to Cricut, Inc. in March 2018. The company was incorporated in 1969 and is headquartered in South Jordan, Utah.

About Purple Innovation

Purple Innovation, Inc. designs and manufactures sleep and other products in the United States and internationally. The company offers mattresses, pillows, cushions, bases, sheets, platforms, adjustable bases, mattress protectors, foundations, blankets, duvets, duvet covers, seat cushions, and pet beds under the Purple brand. It markets and sells its products through its e-commerce online channels, retail brick-and-mortar wholesale partners, third-party online retailers, and Purple showrooms, as well as through its website, Purple.com. The company was founded in 2010 and is headquartered in Lehi, Utah.