Karat Packaging (NASDAQ:KRT) vs. urban-gro (NASDAQ:UGRO) Financial Analysis
by Amy Steele · The Cerbat Gemurban-gro (NASDAQ:UGRO – Get Free Report) and Karat Packaging (NASDAQ:KRT – Get Free Report) are both small-cap industrials companies, but which is the superior stock? We will contrast the two businesses based on the strength of their valuation, earnings, institutional ownership, profitability, risk, dividends and analyst recommendations.
Insider and Institutional Ownership
20.6% of urban-gro shares are held by institutional investors. Comparatively, 25.2% of Karat Packaging shares are held by institutional investors. 4.4% of urban-gro shares are held by insiders. Comparatively, 57.9% of Karat Packaging shares are held by insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a company will outperform the market over the long term.
Profitability
This table compares urban-gro and Karat Packaging’s net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets | |
| urban-gro | -82.11% | -118.44% | -33.76% |
| Karat Packaging | 10.18% | 30.62% | 16.67% |
Earnings and Valuation
This table compares urban-gro and Karat Packaging”s gross revenue, earnings per share and valuation.
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio | |
| urban-gro | $17.40 million | 0.01 | -$22.10 million | ($27.87) | -0.00 |
| Karat Packaging | $467.74 million | 2.00 | $31.48 million | $2.50 | 18.78 |
Karat Packaging has higher revenue and earnings than urban-gro. urban-gro is trading at a lower price-to-earnings ratio than Karat Packaging, indicating that it is currently the more affordable of the two stocks.
Analyst Recommendations
This is a summary of current ratings and recommmendations for urban-gro and Karat Packaging, as reported by MarketBeat.com.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score | |
| urban-gro | 1 | 0 | 0 | 0 | 1.00 |
| Karat Packaging | 1 | 2 | 3 | 0 | 2.33 |
Karat Packaging has a consensus target price of $36.50, suggesting a potential downside of 22.24%. Given Karat Packaging’s stronger consensus rating and higher possible upside, analysts clearly believe Karat Packaging is more favorable than urban-gro.
Volatility & Risk
urban-gro has a beta of -2.91, suggesting that its share price is 391% less volatile than the S&P 500. Comparatively, Karat Packaging has a beta of 0.84, suggesting that its share price is 16% less volatile than the S&P 500.
Summary
Karat Packaging beats urban-gro on 14 of the 14 factors compared between the two stocks.
About urban-gro
urban-gro, Inc. engages in the designing, engineering, building, and integrating complex environmental equipment systems for indoor controlled environment agriculture (CEA) cultivation and retail facilities in the United States, Canada, and Europe. The company provides architectural design, engineering, and construction services comprising pre-construction, cultivation space programming (CSP), architectural and interior design, engineering, integrated cultivation design, owner's representative/construction management, and general contracting services; and maintenance, training, and support services. It also offers facility and equipment commissioning services; gro-care crop and asset protection services, including training services, equipment maintenance services, asset protection program, and an interactive online operating support system for gro-care and client document delivery and project management; and property condition assessment services. In addition, the company provides integrated equipment systems solutions, such as design, source, and integration of complex environmental equipment systems comprising heating, ventilation, and air conditioning solutions, as well as environmental control, fertigation, irrigation distribution, water treatment, and wastewater reclamation systems; and commercial horticulture lighting solutions, rolling and automated container benching systems, specialty fans, microbial mitigation, and odor reduction systems. Further, it offers value-Added Reselling (VAR) of cultivation equipment systems; and strategic vendor relationships with premier manufacturers. It primarily markets and sells its solutions to clients in the CEA that includes operators and facilitators in the cannabis and produce markets; and commercial sectors comprising food and beverage consumer packaged goods companies, healthcare, higher education, and hospitality. urban-gro, Inc. was founded in 2014 and is based in Lafayette, Colorado.
About Karat Packaging
Karat Packaging Inc., together with its subsidiaries, engages in the manufacture and distribution of single-use disposable products in plastic, paper, biopolymer-based, and other compostable forms used in various restaurant and foodservice settings. It provides food and take-out containers, bags, tableware, cups, lids, cutlery, straws, specialty beverage ingredients, equipment, gloves, and other products under the Karat Earth brand. The company also provides new product development, design, printing, and logistics services. It offers its products to national and regional distributors, restaurant chains, retail establishments, and online customers. The company was founded in 2000 and is based in Chino, California.