Sonos (NASDAQ:SONO – Get Free Report) and KB Home (NYSE:KBH – Get Free Report) are both consumer discretionary companies, but which is the better stock? We will contrast the two companies based on the strength of their analyst recommendations, earnings, institutional ownership, dividends, risk, profitability and valuation.
Risk and Volatility
Sonos has a beta of 1.93, suggesting that its share price is 93% more volatile than the S&P 500. Comparatively, KB Home has a beta of 1.34, suggesting that its share price is 34% more volatile than the S&P 500.
Earnings and Valuation
This table compares Sonos and KB Home”s revenue, earnings per share (EPS) and valuation.
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio | |
| Sonos | $1.44 billion | 1.18 | -$61.14 million | $0.45 | 32.06 |
| KB Home | $6.24 billion | 0.50 | $428.79 million | $2.87 | 17.72 |
KB Home has higher revenue and earnings than Sonos. KB Home is trading at a lower price-to-earnings ratio than Sonos, indicating that it is currently the more affordable of the two stocks.
Profitability
This table compares Sonos and KB Home’s net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets | |
| Sonos | 3.82% | 19.10% | 8.67% |
| KB Home | 4.94% | 7.67% | 4.37% |
Analyst Ratings
This is a breakdown of recent ratings and recommmendations for Sonos and KB Home, as provided by MarketBeat.com.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score | |
| Sonos | 0 | 3 | 2 | 0 | 2.40 |
| KB Home | 1 | 10 | 4 | 0 | 2.20 |
Sonos currently has a consensus price target of $20.00, suggesting a potential upside of 38.64%. KB Home has a consensus price target of $60.17, suggesting a potential upside of 18.31%. Given Sonos’ stronger consensus rating and higher possible upside, research analysts plainly believe Sonos is more favorable than KB Home.
Institutional & Insider Ownership
85.8% of Sonos shares are held by institutional investors. Comparatively, 96.1% of KB Home shares are held by institutional investors. 1.3% of Sonos shares are held by insiders. Comparatively, 4.7% of KB Home shares are held by insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock is poised for long-term growth.
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 KB Home
KB Home operates as a homebuilding company in the United States. It operates through four segments: West Coast, Southwest, Central, and Southeast. It builds and sells various homes, including attached and detached single-family residential homes, townhomes, and condominiums primarily for first-time, first move-up, second move-up, and active adult homebuyers. The company also provides financial services, such as insurance products and title services, as well as mortgage banking services, including residential consumer mortgage loans to homebuyers. It has operations in Arizona, California, Colorado, Florida, Idaho, Nevada, North Carolina, Texas, and Washington. The company was formerly known as Kaufman and Broad Home Corporation and changed its name to KB Home in January 2001. KB Home was founded in 1957 and is based in Los Angeles, California.
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