Aerogrow International (OTCMKTS:AERO) & ZKH Group (NYSE:ZKH) Critical Analysis

Aerogrow International (OTCMKTS:AERO) and ZKH Group (NYSE:ZKH) are both small-cap consumer discretionary companies, but which is the superior stock? We will compare the two companies based on the strength of their analyst recommendations, valuation, dividends, institutional ownership, profitability, earnings and risk.

Profitability

This table compares Aerogrow International and ZKH Group’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Aerogrow International	N/A	N/A	N/A
ZKH Group	-2.47%	-6.86%	-3.11%

Institutional and Insider Ownership

9.5% of ZKH Group shares are owned by institutional investors. 12.8% of Aerogrow International shares are owned by insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a company will outperform the market over the long term.

Analyst Recommendations

This is a breakdown of recent ratings and price targets for Aerogrow International and ZKH Group, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Aerogrow International	0	0	0	0	0.00
ZKH Group	0	0	2	0	3.00

ZKH Group has a consensus price target of $12.65, suggesting a potential upside of 240.05%. Given ZKH Group’s stronger consensus rating and higher probable upside, analysts plainly believe ZKH Group is more favorable than Aerogrow International.

Earnings and Valuation

This table compares Aerogrow International and ZKH Group”s revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Aerogrow International	$39.21 million	2.81	$60,000.00	$0.28	11.46
ZKH Group	$1.23 billion	0.39	-$43.00 million	($0.35)	-10.63

Aerogrow International has higher earnings, but lower revenue than ZKH Group. ZKH Group is trading at a lower price-to-earnings ratio than Aerogrow International, indicating that it is currently the more affordable of the two stocks.

Summary

Aerogrow International beats ZKH Group on 8 of the 13 factors compared between the two stocks.

About Aerogrow International

AeroGrow International, Inc. engages in the development, marketing, direct-selling, and wholesale of indoor garden systems to consumers and retailers worldwide. The company's principal products include indoor gardens and proprietary seed pod kits that allow consumers to grow vegetables, such as tomatoes, chili peppers, and salad greens; fresh herbs comprising cilantro, chives, basil, dill, oregano, and mint; and flowers, which comprise petunias, snapdragons, geraniums, and vinca. It also provides grow lights and a patented nutrient formula, as well as various cooking, gardening, and decor accessories. The company offers its in-home garden systems under the AeroGardens name. Its products are used in the gardening, cooking, healthy eating, and home and office décor markets. The company also provides its products through online and in-store retail distribution, as well as through direct-to-consumer sales channels. AeroGrow International, Inc. was founded in 2002 and is headquartered in Boulder, Colorado. AeroGrow International, Inc. operates as a subsidiary of SMG Growing Media, Inc.

About ZKH Group

ZKH Group Limited develops and operates a maintenance, repair, and operating (MRO) products trading and service platform that offers spare parts, chemicals, manufacturing parts, general consumables, and office supplies in the People’s Republic of China. The company provides MRO procurement and management services; digitalized MRO procurement solutions; and logistics and warehousing services. It also engages in the production and sale of intelligent warehousing equipment. ZKH Group Limited was founded in 1998 and is based in Shanghai, the People’s Republic of China.