Critical Review: Purple Innovation (NASDAQ:PRPL) versus Mohawk Industries (NYSE:MHK)

Mohawk Industries (NYSE:MHK) and Purple Innovation (NASDAQ:PRPL) are both consumer discretionary companies, but which is the better stock? We will contrast the two businesses based on the strength of their institutional ownership, valuation, analyst recommendations, profitability, risk, dividends and earnings.

Earnings and Valuation

This table compares Mohawk Industries and Purple Innovation”s top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Mohawk Industries	$10.79 billion	0.81	$369.90 million	$7.55	17.03
Purple Innovation	$468.73 million	0.02	-$51.41 million	($11.24)	-0.22

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

Analyst Recommendations

This is a summary of current ratings and recommmendations for Mohawk Industries and Purple Innovation, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Mohawk Industries	0	12	3	1	2.31
Purple Innovation	1	2	0	0	1.67

Mohawk Industries presently has a consensus target price of $130.50, indicating a potential upside of 1.48%. Purple Innovation has a consensus target price of $16.25, indicating a potential upside of 560.57%. Given Purple Innovation’s higher possible upside, analysts plainly believe Purple Innovation is more favorable than Mohawk Industries.

Volatility and Risk

Mohawk Industries has a beta of 1.18, indicating that its share price is 18% more volatile than the S&P 500. Comparatively, Purple Innovation has a beta of 1.4, indicating that its share price is 40% more volatile than the S&P 500.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
Mohawk Industries	4.15%	7.50%	4.60%
Purple Innovation	-10.74%	N/A	-10.89%

Insider & Institutional Ownership

79.0% of Mohawk Industries shares are held by institutional investors. Comparatively, 88.4% of Purple Innovation shares are held by institutional investors. 17.9% of Mohawk Industries shares are held by insiders. Comparatively, 54.0% of Purple Innovation shares are held by insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a company is poised for long-term growth.

Summary

Mohawk Industries beats Purple Innovation on 11 of the 15 factors compared between the two stocks.

About Mohawk Industries

Mohawk Industries, Inc. designs, manufactures, sources, distributes, and markets flooring products for residential and commercial remodeling, and new construction channels in the United States, Europe, Latin America, and internationally. It operates through three segments: Global Ceramic, Flooring North America, and Flooring Rest of the World. The company provides ceramic, porcelain, and natural stone tiles products for floor and wall applications; natural stones, porcelain slabs, and quartz countertops, as well as installation materials; floor covering products comprising broadloom carpets, carpet tiles, rugs and mats, carpet pads, laminates, medium-density fiberboards, wood floorings, luxury vinyl tiles, and sheet vinyl; and roofing panels, insulation boards, mezzanine flooring products, medium-density fiberboard, and chipboards. It also licenses its intellectual property to flooring manufacturers. The company sells its products under the American Olean, Daltile, Decortiles, Eliane, EmilGroup, KAI, Kerama Marazzi, Marazzi, Ragno, Aladdin Commercial, Durkan, Foss, IVC, Karastan, Mohawk, Mohawk Group, Mohawk Home, Pergo, Portico, Quick-Step, Feltex, GH Commercial, Godfrey Hirst, Hycraft, IVC Commercial, IVC Home, Lentex, Leoline, and Moduleo, Redbook, Unilin, and Vitromex brands. It offers its products to company-owned service centers and stores, company-operated distributors, floor covering retailers, wholesalers, mass merchandisers, department stores, shop at home, buying groups, ceramic tile specialists, e-commerce retailers, residential builders, independent distributors, commercial contractors, and commercial end users. The company was incorporated in 1988 and is headquartered in Calhoun, Georgia.

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.