Critical Review: Sportsman’s Warehouse (NASDAQ:SPWH) versus Williams-Sonoma (NYSE:WSM)

Williams-Sonoma (NYSE:WSM) and Sportsman’s Warehouse (NASDAQ:SPWH) are both consumer discretionary companies, but which is the superior business? We will compare the two businesses based on the strength of their profitability, institutional ownership, earnings, analyst recommendations, risk, dividends and valuation.

Earnings and Valuation

This table compares Williams-Sonoma and Sportsman’s Warehouse”s revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Williams-Sonoma	$7.81 billion	3.77	$1.09 billion	$9.77	25.56
Sportsman’s Warehouse	$1.22 billion	0.03	-$50.06 million	($1.23)	-0.85

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

Insider & Institutional Ownership

99.3% of Williams-Sonoma shares are owned by institutional investors. Comparatively, 83.0% of Sportsman’s Warehouse shares are owned by institutional investors. 1.1% of Williams-Sonoma shares are owned by company insiders. Comparatively, 3.8% of Sportsman’s Warehouse shares are owned 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.

Volatility & Risk

Williams-Sonoma has a beta of 1.48, meaning that its stock price is 48% more volatile than the S&P 500. Comparatively, Sportsman’s Warehouse has a beta of 0.44, meaning that its stock price is 56% less volatile than the S&P 500.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
Williams-Sonoma	14.73%	53.48%	20.50%
Sportsman’s Warehouse	-3.94%	-10.50%	-2.29%

Analyst Ratings

This is a summary of current ratings and target prices for Williams-Sonoma and Sportsman’s Warehouse, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Williams-Sonoma	0	8	10	0	2.56
Sportsman’s Warehouse	1	2	1	0	2.00

Williams-Sonoma presently has a consensus target price of $247.94, suggesting a potential downside of 0.71%. Sportsman’s Warehouse has a consensus target price of $2.12, suggesting a potential upside of 104.33%. Given Sportsman’s Warehouse’s higher possible upside, analysts plainly believe Sportsman’s Warehouse is more favorable than Williams-Sonoma.

Summary

Williams-Sonoma beats Sportsman’s Warehouse on 12 of the 14 factors compared between the two stocks.

About Williams-Sonoma

Williams-Sonoma, Inc. operates as an omni-channel specialty retailer of various products for home. It offers cooking, dining, and entertaining products, such as cookware, tools, electrics, cutlery, tabletop and bar, outdoor, furniture, and a library of cookbooks under the Williams Sonoma Home brand, as well as home furnishings and decorative accessories under the Williams Sonoma lifestyle brand; and furniture, bedding, lighting, rugs, table essentials, and decorative accessories under the Pottery Barn brand. The company also provides home decor products under the West Elm brand; kids accessories under the Pottery Barn Kids brand; and an organic bedding to multi-purpose furniture under the Pottery Barn Teen brand. In addition, it offers made-to-order lighting, hardware, furniture, and home decors inspired by history under the Rejuvenation brand; personalized products and custom gifts under the Mark and Graham brand; and colorful and vintage-inspired heirloom products under the GreenRow, as well as operates a 3-D imaging and augmented reality platform for the home furnishings and décor industry under the Outward brand. The company markets its products through e-commerce websites, direct-mail catalogs, and retail stores. Williams-Sonoma, Inc. was founded in 1956 and is headquartered in San Francisco, California.

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.