Financial Comparison: Digital Brands Group (NASDAQ:DBGI) and Arhaus (NASDAQ:ARHS)

Arhaus (NASDAQ:ARHS) and Digital Brands Group (NASDAQ:DBGI) are both small-cap consumer discretionary companies, but which is the superior investment? We will compare the two businesses based on the strength of their dividends, analyst recommendations, earnings, institutional ownership, valuation, profitability and risk.

Institutional and Insider Ownership

27.9% of Arhaus shares are held by institutional investors. Comparatively, 1.6% of Digital Brands Group shares are held by institutional investors. 1.2% of Arhaus shares are held by company insiders. Comparatively, 0.0% of Digital Brands Group shares are held by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock will outperform the market over the long term.

Profitability

This table compares Arhaus and Digital Brands Group’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Arhaus	4.91%	17.23%	4.94%
Digital Brands Group	-768.25%	-561.70%	-90.27%

Earnings & Valuation

This table compares Arhaus and Digital Brands Group”s gross revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Arhaus	$1.41 billion	1.18	$67.26 million	$0.50	23.40
Digital Brands Group	$5.78 million	0.18	-$28.25 million	($88.79)	-0.01

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

Analyst Recommendations

This is a breakdown of current recommendations and price targets for Arhaus and Digital Brands Group, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Arhaus	0	3	6	1	2.80
Digital Brands Group	1	0	0	0	1.00

Arhaus currently has a consensus target price of $10.78, indicating a potential downside of 7.88%. Given Arhaus’ stronger consensus rating and higher probable upside, equities analysts clearly believe Arhaus is more favorable than Digital Brands Group.

Volatility and Risk

Arhaus has a beta of 2.29, suggesting that its stock price is 129% more volatile than the S&P 500. Comparatively, Digital Brands Group has a beta of 0.04, suggesting that its stock price is 96% less volatile than the S&P 500.

Summary

Arhaus beats Digital Brands Group on 15 of the 15 factors compared between the two stocks.

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.

About Digital Brands Group

Digital Brands Group, Inc. engages in the provision of apparel products under various brands on direct-to-consumer and wholesale basis. It operates through DSTLD, Bailey, H&J, Stateside, and Sundry segments. The company designs, manufactures, and sells women's apparel, such as tops, sweaters, dresses, jumpsuits, bottoms, sets, jackets, rompers, suiting, sportswear, shirts, jackets, pants, shorts, polos, T-shirts, skirts, athleisure bottoms, denims, and other accessory products, as well as suiting for men. It sells its products under the Bailey 44, Harper & Jones, Stateside, Sunnyside, DSTLD, Sundry, and ACE Studios brand names. The company sells directly to the consumer through its websites, as well as through its wholesale channel in specialty stores, select department stores, and own showrooms. Digital Brands Group, Inc. was formerly known as Denim.LA, Inc. Digital Brands Group, Inc. was incorporated in 2012 and is headquartered in Austin, Texas.