Hovnanian Enterprises (NYSE:HOV) & GoPro (NASDAQ:GPRO) Critical Analysis

GoPro (NASDAQ:GPRO) and Hovnanian Enterprises (NYSE:HOV) are both small-cap consumer discretionary companies, but which is the better investment? We will contrast the two companies based on the strength of their valuation, dividends, institutional ownership, risk, earnings, profitability and analyst recommendations.

Volatility and Risk

GoPro has a beta of 2.42, meaning that its stock price is 142% more volatile than the S&P 500. Comparatively, Hovnanian Enterprises has a beta of 1.83, meaning that its stock price is 83% more volatile than the S&P 500.

Analyst Recommendations

This is a breakdown of current recommendations for GoPro and Hovnanian Enterprises, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
GoPro	1	0	0	0	1.00
Hovnanian Enterprises	1	3	0	0	1.75

Hovnanian Enterprises has a consensus price target of $97.00, suggesting a potential downside of 27.79%. Given Hovnanian Enterprises’ stronger consensus rating and higher probable upside, analysts plainly believe Hovnanian Enterprises is more favorable than GoPro.

Earnings & Valuation

This table compares GoPro and Hovnanian Enterprises”s revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
GoPro	$568.59 million	0.18	-$93.49 million	($0.99)	-0.61
Hovnanian Enterprises	$2.98 billion	0.26	$63.87 million	$3.64	36.91

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

Institutional & Insider Ownership

70.1% of GoPro shares are owned by institutional investors. Comparatively, 65.4% of Hovnanian Enterprises shares are owned by institutional investors. 18.1% of GoPro shares are owned by insiders. Comparatively, 22.7% of Hovnanian Enterprises shares are owned by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock is poised for long-term growth.

Profitability

This table compares GoPro and Hovnanian Enterprises’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
GoPro	-28.52%	-243.59%	-28.04%
Hovnanian Enterprises	1.25%	11.23%	2.89%

Summary

Hovnanian Enterprises beats GoPro on 11 of the 13 factors compared between the two stocks.

About GoPro

GoPro, Inc. develops and sells cameras, mountable and wearable accessories, and subscription services and software in the Americas, Europe, the Middle East, Africa, the Asia and Pacific region, and internationally. The company provides cloud connected HERO12 Black, HERO11 Black, HERO11 Black Mini, HERO10 Black, HERO10 Black Bones, and HERO9 Black waterproof cameras; MAX, a 360-degree waterproof camera; Premium and Premium+ subscription services, which include full access to the Quik app, cloud storage supporting source video and photo quality, camera replacement, and damage protection; Quik subscription that offers access to editing tools, which allows users to edit photos, videos, and create cinematic stories; and Quik desktop and mobile apps that enable users to get their favorite photos and videos with footage from any phone or camera. It also offers mounts and accessories comprising equipment-based mounts consisting of helmet, handlebar, roll bar, and tripod mounts that enable consumers to wear the mount on their bodies, such as wrist housings, magnetic swivel clips, chest harnesses, and head straps; media, display, and light mods; spare batteries, dive filters, and charging accessories and cables; and lifestyle gear, such as bags, backpacks, cases, t-shirts, hats, and other soft goods. In addition, the company provides mobile, desktop, and web applications that provides media workflow for archiving, editing, multi-clip story creation, and sharing content on the fly. GoPro, Inc. sells its products through retailers and wholesale distributors, as well as through its GoPro.com website. The company was formerly known as Woodman Labs, Inc. and changed its name to GoPro, Inc. in February 2014. GoPro, Inc. was founded in 2002 and is headquartered in San Mateo, California.

About Hovnanian Enterprises

Hovnanian Enterprises, Inc., through its subsidiaries, designs, constructs, markets, and sells residential homes in the United States. It offers single-family detached homes, attached townhomes and condominiums, urban infill, and active lifestyle homes with amenities, such as clubhouses, swimming pools, tennis courts, tot lots, and open areas. The company markets and builds homes for first-time buyers, first-time and second-time move-up buyers, luxury buyers, active lifestyle buyers, and empty nesters. It also provides mortgage loans, title insurance, and homeowner’s insurance services. The company was founded in 1959 and is headquartered in Matawan, New Jersey.