Gaia (NASDAQ: GAIA) and Sally Beauty Holdings (NYSE:SBH) are both consumer discretionary companies, but which is the better business? We will compare the two companies based on the strength of their analyst recommendations, institutional ownership, valuation, earnings, risk, dividends and profitability.

Institutional and Insider Ownership

31.4% of Gaia shares are owned by institutional investors. 42.8% of Gaia shares are owned by company insiders. Comparatively, 1.0% of Sally Beauty Holdings shares are owned by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company is poised for long-term growth.

Profitability

This table compares Gaia and Sally Beauty Holdings’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Gaia 392.56% -17.07% -15.46%
Sally Beauty Holdings 5.89% -80.60% 11.83%

Volatility and Risk

Gaia has a beta of 1.2, suggesting that its share price is 20% more volatile than the S&P 500. Comparatively, Sally Beauty Holdings has a beta of 0.7, suggesting that its share price is 30% less volatile than the S&P 500.

Analyst Ratings

This is a breakdown of recent ratings and target prices for Gaia and Sally Beauty Holdings, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Gaia 0 0 1 0 3.00
Sally Beauty Holdings 1 7 3 0 2.18

Gaia presently has a consensus price target of $17.00, suggesting a potential upside of 38.78%. Sally Beauty Holdings has a consensus price target of $23.88, suggesting a potential upside of 37.77%. Given Gaia’s stronger consensus rating and higher probable upside, analysts plainly believe Gaia is more favorable than Sally Beauty Holdings.

Valuation & Earnings

This table compares Gaia and Sally Beauty Holdings’ gross revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Gaia $21.56 million 8.61 -$18.78 million $5.59 2.19
Sally Beauty Holdings $3.94 billion 0.58 $603.02 million $1.64 10.57

Sally Beauty Holdings has higher revenue and earnings than Gaia. Gaia is trading at a lower price-to-earnings ratio than Sally Beauty Holdings, indicating that it is currently the more affordable of the two stocks.

Summary

Gaia beats Sally Beauty Holdings on 9 of the 13 factors compared between the two stocks.

Gaia Company Profile

Gaia, Inc., formerly Gaiam, Inc., is engaged in providing global digital video subscription service. The Company is a global digital video streaming service and online community delivering curated media to its subscribers in over 120 countries. It provides its members access to approximately 7,000 video titles. Its video content is available to its subscribers through online digital streaming on virtually any Internet-connected device on a commercial-free basis. In addition to streaming, the Company’s subscribers can download its video content to their devices, so they can view its content without being actively connected to the Internet. Through the Gaia service, the Company’s subscribers have access to a library of inspiring films, personal growth-related content, documentaries, interviews, yoga classes and fitness. The Company has also created a fitness and yoga-focused version of its video service. The Company also operates a digital versatile disc (DVD) subscription club.

Sally Beauty Holdings Company Profile

Sally Beauty Holdings, Inc. is an international specialty retailer and distributor of professional beauty supplies with operations primarily in North America, South America and Europe. The Company operates through two business segments: Sally Beauty Supply and Beauty Systems Group (BSG). Sally Beauty Supply is a domestic and international chain of cash and carry retail stores, which offers professional beauty supplies to both salon professionals and retail customers primarily in North America, Puerto Rico, and parts of Europe and South America. BSG, including its franchise-based business Armstrong McCall, is a full service beauty supply distributor, which offers professional brands of beauty products directly to salons and salon professionals through its own sales force and professional-only stores (including franchise stores) in partially exclusive geographical territories in North America and parts of Europe.

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