Critical Analysis: Northann (NYSE:NCL) versus AZEK (NYSE:AZEK)

Northann (NYSE:NCL) and AZEK (NYSE:AZEK) are both consumer discretionary companies, but which is the better business? We will contrast the two businesses based on the strength of their risk, dividends, profitability, analyst recommendations, valuation, earnings and institutional ownership.

Analyst Recommendations

This is a breakdown of current recommendations for Northann and AZEK, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Northann	0	0	0	0	N/A
AZEK	0	4	13	0	2.76

AZEK has a consensus price target of $44.11, indicating a potential downside of 2.77%. Given AZEK’s higher possible upside, analysts clearly believe AZEK is more favorable than Northann.

Institutional and Insider Ownership

0.3% of Northann shares are held by institutional investors. Comparatively, 97.4% of AZEK shares are held by institutional investors. 3.1% of AZEK shares are held 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.

Valuation & Earnings

This table compares Northann and AZEK’s revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Northann	$13.97 million	0.81	-$7.13 million	N/A	N/A
AZEK	$1.37 billion	4.89	$67.96 million	$0.79	57.42

AZEK has higher revenue and earnings than Northann.

Profitability

This table compares Northann and AZEK’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Northann	N/A	N/A	N/A
AZEK	8.57%	9.61%	5.79%

Summary

AZEK beats Northann on 10 of the 10 factors compared between the two stocks.

About Northann

Northann Corp. engages in the manufacture, wholesale, and retail of the 3D printed vinyl flooring panels and other decorative panels in North America, Europe, and internationally. The company offers its products under the Benchwick brand name. Northann Corp. was founded in 2013 and is based in Elk Grove, California.

About AZEK

The AZEK Company Inc. engages in the design, manufacturing, and selling of building products for residential, commercial, and industrial markets in the United States and Canada. It operates through two segments: Residential and Commercial. The Residential segment designs and manufactures engineered outdoor living products, such as decking, railing, trim and molding, siding and cladding, pergolas and cabanas, and accessories under the TimberTech, AZEK Exteriors, VERSATEX, ULTRALOX, StruXure, and INTEX brands. The Commercial segment offers bathroom partitions, shower and dressing stalls, lockers and other storage solutions, and engineered plastic sheet products under the Aria, Eclipse, Hiny Hiders, TuffTec, and Duralife brands. This segment also offers bathroom partitions, shower and dressing stalls, lockers, storage solutions, extruded plastic sheet, and non-fabricated products under the Aria, Eclipse, Hiny Hiders, TuffTec, and Duralife brands. The company was formerly known as Delaware corporation and changed its name to The AZEK Company Inc. in June 2020. The AZEK Company Inc. was incorporated in 2013 and is headquartered in Chicago, Illinois.