Critical Survey: Caesarstone (CSTE) & Its Peers

Caesarstone (NASDAQ:CSTE) is one of 38 public companies in the “BLDG&CONST – MISC” industry, but how does it weigh in compared to its competitors? We will compare Caesarstone to similar companies based on the strength of its institutional ownership, profitability, earnings, risk, analyst recommendations, valuation and dividends.

Profitability

This table compares Caesarstone and its competitors’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Caesarstone	-11.93%	-13.23%	-6.76%
Caesarstone Competitors	-11.01%	65.74%	4.94%

Risk and Volatility

Caesarstone has a beta of 0.18, suggesting that its share price is 82% less volatile than the S&P 500. Comparatively, Caesarstone’s competitors have a beta of 0.97, suggesting that their average share price is 3% less volatile than the S&P 500.

Analyst Recommendations

This is a breakdown of current ratings for Caesarstone and its competitors, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Caesarstone	0	0	1	0	3.00
Caesarstone Competitors	242	1410	2265	108	2.56

Caesarstone currently has a consensus target price of $6.00, indicating a potential upside of 203.03%. As a group, “BLDG&CONST – MISC” companies have a potential upside of 16.35%. Given Caesarstone’s stronger consensus rating and higher probable upside, research analysts clearly believe Caesarstone is more favorable than its competitors.

Insider and Institutional Ownership

33.7% of Caesarstone shares are held by institutional investors. Comparatively, 91.0% of shares of all “BLDG&CONST – MISC” companies are held by institutional investors. 3.8% of shares of all “BLDG&CONST – MISC” companies are held by company insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock is poised for long-term growth.

Valuation & Earnings

This table compares Caesarstone and its competitors top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Net Income	Price/Earnings Ratio
Caesarstone	$443.22 million	-$42.83 million	-1.46
Caesarstone Competitors	$6.91 billion	$580.08 million	22.42

Caesarstone’s competitors have higher revenue and earnings than Caesarstone. Caesarstone is trading at a lower price-to-earnings ratio than its competitors, indicating that it is currently more affordable than other companies in its industry.

Summary

Caesarstone competitors beat Caesarstone on 10 of the 13 factors compared.

About Caesarstone

Caesarstone Ltd., together with its subsidiaries, designs, develops, manufactures, and markets engineered stone and other materials under the Caesarstone brand in the United States, Canada, Latin America, Australia, Asia, Europe, the Middle East and Africa, and Israel. The company’s engineered stone slabs are primarily used as indoor and outdoor kitchen countertops in the renovation and remodeling, and residential construction sectors. Its products are also used in other applications, such as vanity tops, wall panels, back splashes, floor tiles, stairs, furniture, and other interior and exterior surfaces that are used in various residential and non-residential applications. The company also offers porcelain products under the Lioli brand for countertops, flooring, and cladding applications; sells natural stone, sinks, and various ancillary fabrication tools and materials; and resells natural stones, as well as various ancillaries, and fabrication and installation accessories, as well as provides fabrication and installation services. It sells its products directly to wholesalers, resellers, and fabricators; and through direct sales force and indirect network of independent distributors. The company was formerly known as Caesarstone Sdot Yam Ltd. and changed its name to Caesarstone Ltd. in June 2016. Caesarstone Ltd. was founded in 1987 and is headquartered in Menashe, Israel.