Analyzing Ethan Allen Interiors (NYSE:ETD) & Sonos (NASDAQ:SONO)

Sonos (NASDAQ:SONO) and Ethan Allen Interiors (NYSE:ETD) are both consumer discretionary companies, but which is the superior investment? We will compare the two companies based on the strength of their profitability, analyst recommendations, risk, institutional ownership, dividends, valuation and earnings.

Analyst Recommendations

This is a breakdown of current ratings and price targets for Sonos and Ethan Allen Interiors, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Sonos	0	3	2	0	2.40
Ethan Allen Interiors	1	2	0	0	1.67

Sonos presently has a consensus price target of $20.00, indicating a potential upside of 11.79%. Ethan Allen Interiors has a consensus price target of $22.00, indicating a potential upside of 5.17%. Given Sonos’ stronger consensus rating and higher possible upside, equities analysts plainly believe Sonos is more favorable than Ethan Allen Interiors.

Earnings and Valuation

This table compares Sonos and Ethan Allen Interiors”s top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Sonos	$1.49 billion	1.42	-$61.14 million	$0.45	39.76
Ethan Allen Interiors	$579.49 million	0.91	$39.88 million	$1.56	13.41

Ethan Allen Interiors has lower revenue, but higher earnings than Sonos. Ethan Allen Interiors is trading at a lower price-to-earnings ratio than Sonos, indicating that it is currently the more affordable of the two stocks.

Insider & Institutional Ownership

85.8% of Sonos shares are held by institutional investors. Comparatively, 83.8% of Ethan Allen Interiors shares are held by institutional investors. 1.3% of Sonos shares are held by insiders. Comparatively, 9.9% of Ethan Allen Interiors shares are held by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock will outperform the market over the long term.

Risk & Volatility

Sonos has a beta of 1.93, indicating that its share price is 93% more volatile than the S&P 500. Comparatively, Ethan Allen Interiors has a beta of 1.03, indicating that its share price is 3% more volatile than the S&P 500.

Profitability

This table compares Sonos and Ethan Allen Interiors’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Sonos	3.82%	19.10%	8.67%
Ethan Allen Interiors	6.88%	7.88%	5.17%

Summary

Sonos beats Ethan Allen Interiors on 10 of the 14 factors compared between the two stocks.

About Sonos

Sonos, Inc., together with its subsidiaries, designs, develops, manufactures, and sells audio products and services in the Americas, Europe, the Middle East, Africa, and the Asia Pacific. It offers wireless, portable, and home theater speakers; components; and accessories. The company offers its products through approximately 10,000 third-party retail stores, including custom installers of home audio systems; and e-commerce retailers, as well as through its website. The company was formerly known as Rincon Audio, Inc. and changed its name to Sonos, Inc. in May 2004. Sonos, Inc. was incorporated in 2002 and is headquartered in Santa Barbara, California.

About Ethan Allen Interiors

Ethan Allen Interiors Inc. operates as an interior design company, and manufacturer and retailer of home furnishings in the United States, Mexico, Honduras, and Canada. The company operates in two segments, Wholesale and Retail. Its products include case goods items, such as beds, dressers, armoires, tables, chairs, buffets, entertainment units, home office furniture, and wooden accents; upholstery comprising fabric-covered items, such as sleepers, recliners and other motion furniture, chairs, ottomans, custom pillows, sofas, loveseats, cut fabrics, and leather; and home accent items consisting of window treatments and drapery hardware, wall decors, florals, lighting, clocks, mattresses, bedspreads, throws, pillows, decorative accents, area rugs, wall coverings, and home and garden furnishings. The company markets and sells its products under the Ethan Allen brand through home furnishing retail networks and independent retailers, as well as through ethanallen.com website. It operates a network of design centers. Ethan Allen Interiors Inc. was founded in 1932 and is headquartered in Danbury, Connecticut.