We recently compiled a list of the 10 Best Home Appliance Stocks to Invest In. In this article, we are going to take a look at where SharkNinja, Inc. (NYSE:SN) stands against the other home appliance stocks.
The global home appliances market, estimated by Fortune Business Insights to be worth $708.15 billion in 2023, is expected to expand at a CAGR of 6.20% from $743.56 billion in 2024 to $1,203.11 billion by 2032. In terms of market share, North America accounted for 32.51% of the home appliances market in 2023.
The market is expanding more quickly due to consumer demand for energy-efficient and technologically advanced home appliances. A Parks Associates consumer survey in 2022 shows that 38% of homes own one or more smart home devices, which represents a slight 2% rise from the previous year. In 2021, about 30% of customers bought a smart home gadget, and 44% of US households wanted to do the same in 2023. Consumer interest in the expanding array of Internet-connected gadgets, such as energy management programs and smart home security systems, is still high. The user experience is further enhanced by improved mobile integration.
Parks Associates research director Chris White pointed out how customer expectations are rising and how demand for integrated smart home experiences is expanding. Out of 10,000 houses that participated in the survey, 88% had access to the Internet, 54% had a connected health device, 40% had a security system, and 56% had a smart TV. However, concerns about security and connectivity are growing among manufacturers as more devices find their way into homes and offices.
Secondly, instead of using traditional middlemen, more and more consumers are opting to purchase directly from manufacturers of household appliances. According to PWC’s June 2023 Global Consumer Insights Pulse Survey, the majority of customers (63%) report having bought products straight from a brand’s website and anticipate this percentage to rise. Another 29% of consumers state that, while they haven’t done so yet, they are thinking about going direct-to-consumer.
Another study by J.D. Power 2023 named U.S. Appliance Satisfaction Study reveals that 75% of appliance purchases occur on the first visit to the store and that nearly three-fourths (71%) of home appliance transactions take place in-store. Even with 29% of purchases made online, the majority of consumers still prefer to see the equipment in person.
Last year Christina Cooley, home intelligence lead at J.D. Power, stated:
“This year’s data shows us that 56% of home appliance shoppers are doing their research online before heading in store to purchase,” “Though price is almost always going to be the main driver of whether someone decides to purchase an appliance or not, one-third of buyers did not purchase because they were seeking specific options and features, and one-fifth indicated they couldn’t purchase, as their desired appliance wasn’t in stock.”
According to the American Customer Satisfaction Index Household Appliance and Electronics Study of 2024, with slight drops in both product and service quality, the household appliance market—which includes washers, dryers, dishwashers, refrigerators, ranges/cooktops/ovens, and over-the-range microwaves—falls 1% to an ACSI score of 80. The only appliances that have grown year over year are dishwashers and refrigerators (both up 1% to 80), with the range/oven/cooktop category seeing the largest loss, falling 4% to 79.
Jamie Rosenberg, Associate Director – Global Household and Personal Care, stated:
“The impact of inflation on the major household appliance market is both profound and complex. Many low-income consumers are delaying upgrades, but for 54% of buyers, breakdowns are the biggest purchase driver. When that happens, demand is relatively inelastic. When we add the impact of mid- to upper-income consumers who are still unleashing pent-up demand from supply constraints over the past three years, we have a market growth rate that is well above normal. Looking ahead, connected appliance innovations that create a convergence of reduced operating costs, and enhanced performance, convenience and sustainability will drive a new wave of trading up that keeps market growth high over the next five years.”
Methodology:
We sifted through holdings of home appliance ETFs and online rankings to form an initial list of 20 home appliance stocks. Then we selected the 10 stocks that were the most popular among institutional investors. The stocks are ranked in ascending order of the number of hedge funds that have stakes in them, as of Q2 2024.
Why are we interested in the stocks that hedge funds pile into? The reason is simple: our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds. Our quarterly newsletter’s strategy selects 14 small-cap and large-cap stocks every quarter and has returned 275% since May 2014, beating its benchmark by 150 percentage points. (see more details here)
A team of professionals prepping for a training seminar, using professional cleaning products produced by the company.
SharkNinja, Inc. (NYSE:SN)
Number of Hedge Fund Holders: 52
SharkNinja, Inc. (NYSE:SN) is a technology and product design firm that uses innovative products to make 5-star lifestyle solutions for customers worldwide. Cleaning, cooking, food preparation, home environment, and beauty items are some of its product categories. It offers hair dryers, fryers, pots and pans, vacuum cleaners, and more.
Three strategy pillars support the company’s success: growing its market share in current categories, entering new ones, and internationalizing its brand. For example, Shark’s foray into the high-end hair dryer industry and Ninja’s launch of the CREAMi ice cream machine have produced noteworthy outcomes, exhibiting notable increases in market share and revenue growth. Growth is further fueled by the plan to introduce two new items a year, one from each brand. Globally, the firm is expanding rapidly in Europe, where it has shown great results in France and Germany. It also expects to continue growing in the United Kingdom, Germany, and Japan. The $112 billion small appliance total addressable market (TAM), which has been expanding steadily, is seen by the company as a significant growth opportunity.
Ave Maria World Equity Fund stated the following regarding SharkNinja, Inc. (NYSE:SN) in its Q2 2024 investor letter:
“Top contributors to performance included SharkNinja, Inc. (NYSE:SN) and Taiwan Semiconductor Manufacturing Company Limited. SharkNinja, Inc. is a global product design and technology company focused on creating solutions that increase efficiency, convenience and enjoyment of consumers’ daily tasks and improve everyday lives. The company has built two billion-dollar brands, Shark and Ninja, and has a proven track record of establishing leadership positions by disrupting numerous household product categories, including cleaning, cooking, food preparation, home entertainment and beauty.”
SharkNinja, Inc. (NYSE:SN)’s sales growth, aided by innovation and expansion into new markets, is predicted to double over the medium term. Profitability is further boosted by strong margins, enhanced efficiencies, and competitive pricing.
David Zorub’s Parsifal Capital Management is among the biggest shareholders in the company, with 2,113,199 shares worth $158.80 million.
Overall SN ranks 4th on our list of the best home appliance stocks to invest in. While we acknowledge the potential of SN as an investment, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns, and doing so within a shorter time frame. If you are looking for an AI stock that is more promising than SN but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
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Disclosure: None. This article is originally published at Insider Monkey.
