Critical Contrast: Immersion (NASDAQ:IMMR) & Sportsman’s Warehouse (NASDAQ:SPWH)

Sportsman’s Warehouse (NASDAQ:SPWH) and Immersion (NASDAQ:IMMR) are both small-cap consumer discretionary companies, but which is the superior investment? We will contrast the two companies based on the strength of their risk, analyst recommendations, profitability, valuation, dividends, institutional ownership and earnings.

Volatility & Risk

Sportsman’s Warehouse has a beta of 0.42, suggesting that its share price is 58% less volatile than the S&P 500. Comparatively, Immersion has a beta of 1.02, suggesting that its share price is 2% more volatile than the S&P 500.

Analyst Ratings

This is a summary of current recommendations for Sportsman’s Warehouse and Immersion, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Sportsman’s Warehouse	1	2	1	0	2.00
Immersion	0	2	1	0	2.33

Sportsman’s Warehouse currently has a consensus target price of $2.12, suggesting a potential upside of 78.57%. Immersion has a consensus target price of $13.50, suggesting a potential upside of 79.52%. Given Immersion’s stronger consensus rating and higher possible upside, analysts clearly believe Immersion is more favorable than Sportsman’s Warehouse.

Profitability

This table compares Sportsman’s Warehouse and Immersion’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Sportsman’s Warehouse	-3.94%	-10.50%	-2.29%
Immersion	0.60%	1.83%	0.82%

Earnings and Valuation

This table compares Sportsman’s Warehouse 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
Sportsman’s Warehouse	$1.21 billion	0.04	-$50.06 million	($1.23)	-0.97
Immersion	$1.73 billion	0.14	$4.52 million	$0.14	53.71

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

Institutional & Insider Ownership

83.0% of Sportsman’s Warehouse shares are owned by institutional investors. Comparatively, 60.6% of Immersion shares are owned by institutional investors. 3.8% of Sportsman’s Warehouse shares are owned by insiders. Comparatively, 10.6% of Immersion shares are owned by insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock is poised for long-term growth.

Summary

Immersion beats Sportsman’s Warehouse on 12 of the 13 factors compared between the two stocks.

About Sportsman’s Warehouse

Sportsman’s Warehouse Holdings, Inc. engages in the retail of sporting and athletic goods. Its products include hunting and shooting, archery, fishing, camping, boating accessories, optics and electronics, knives and tools, and footwear. The company was founded in 1986 and is headquartered in West Jordan, UT.

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.