Analyzing Immersion (NASDAQ:IMMR) and America’s Car-Mart (NASDAQ:CRMT)

America’s Car-Mart (NASDAQ:CRMT) and Immersion (NASDAQ:IMMR) are both small-cap consumer discretionary companies, but which is the superior stock? We will compare the two businesses based on the strength of their valuation, institutional ownership, analyst recommendations, profitability, dividends, risk and earnings.

Volatility and Risk

America’s Car-Mart has a beta of 1.27, indicating that its share price is 27% more volatile than the S&P 500. Comparatively, Immersion has a beta of 1.02, indicating that its share price is 2% more volatile than the S&P 500.

Insider and Institutional Ownership

89.1% of America’s Car-Mart shares are held by institutional investors. Comparatively, 60.6% of Immersion shares are held by institutional investors. 18.4% of America’s Car-Mart shares are held by insiders. Comparatively, 10.6% of Immersion shares are held by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock will outperform the market over the long term.

Analyst Recommendations

This is a breakdown of current ratings and price targets for America’s Car-Mart and Immersion, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
America’s Car-Mart	1	2	0	0	1.67
Immersion	0	2	1	0	2.33

America’s Car-Mart presently has a consensus target price of $14.00, suggesting a potential upside of 704.60%. Immersion has a consensus target price of $13.50, suggesting a potential upside of 87.24%. Given America’s Car-Mart’s higher probable upside, equities research analysts clearly believe America’s Car-Mart is more favorable than Immersion.

Profitability

This table compares America’s Car-Mart and Immersion’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
America’s Car-Mart	-18.21%	-15.19%	-4.73%
Immersion	0.60%	1.83%	0.82%

Valuation & Earnings

This table compares America’s Car-Mart and Immersion”s top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
America’s Car-Mart	$1.28 billion	0.01	-$139.11 million	($23.80)	-0.07
Immersion	$1.73 billion	0.14	$4.52 million	$0.34	21.21

Immersion has higher revenue and earnings than America’s Car-Mart. America’s Car-Mart is trading at a lower price-to-earnings ratio than Immersion, indicating that it is currently the more affordable of the two stocks.

Summary

Immersion beats America’s Car-Mart on 10 of the 14 factors compared between the two stocks.

About America’s Car-Mart

America’s Car-Mart, Inc., through its subsidiaries, operates as an automotive retailer for the used car market in the United States. It primarily sells older model used vehicles and provides financing for its customers. The company was founded in 1981 and is headquartered in Rogers, Arkansas.

About Immersion

Immersion Corporation, together with its subsidiaries, engages in the creation, design, development, and licensing of haptic technologies that allow people to use their sense of touch to engage with and experience various digital products in North America, Europe, and Asia. The company provides technology, patent, and combined licenses. It serves markets, including mobility, gaming, automotive, virtual and augmented reality, and wearables, as well as residential, commercial, and industrial Internet of Things. The company was incorporated in 1993 and is headquartered in Aventura, Florida.