Sportsman’s Warehouse (NASDAQ:SPWH – Get Free Report) and GrowGeneration (NASDAQ:GRWG – Get Free Report) are both small-cap consumer discretionary companies, but which is the better investment? We will compare the two businesses based on the strength of their valuation, profitability, risk, institutional ownership, analyst recommendations, earnings and dividends.
Institutional & Insider Ownership
83.0% of Sportsman’s Warehouse shares are held by institutional investors. Comparatively, 36.0% of GrowGeneration shares are held by institutional investors. 3.8% of Sportsman’s Warehouse shares are held by company insiders. Comparatively, 8.1% of GrowGeneration shares are held by company insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock is poised for long-term growth.
Risk and Volatility
Sportsman’s Warehouse has a beta of 0.42, suggesting that its share price is 58% less volatile than the S&P 500. Comparatively, GrowGeneration has a beta of 2.56, suggesting that its share price is 156% more volatile than the S&P 500.
Profitability
| Net Margins | Return on Equity | Return on Assets | |
| Sportsman’s Warehouse | -3.94% | -10.50% | -2.29% |
| GrowGeneration | -10.07% | -17.44% | -11.52% |
Analyst Recommendations
This is a summary of current ratings and price targets for Sportsman’s Warehouse and GrowGeneration, as provided by MarketBeat.com.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score | |
| Sportsman’s Warehouse | 1 | 2 | 1 | 0 | 2.00 |
| GrowGeneration | 1 | 1 | 1 | 0 | 2.00 |
Sportsman’s Warehouse presently has a consensus price target of $2.12, indicating a potential upside of 63.46%. GrowGeneration has a consensus price target of $2.50, indicating a potential upside of 51.98%. Given Sportsman’s Warehouse’s higher probable upside, research analysts plainly believe Sportsman’s Warehouse is more favorable than GrowGeneration.
Earnings and Valuation
This table compares Sportsman’s Warehouse and GrowGeneration”s 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) | -1.06 |
| GrowGeneration | $161.74 million | 0.60 | -$24.05 million | ($0.27) | -6.09 |
GrowGeneration has lower revenue, but higher earnings than Sportsman’s Warehouse. GrowGeneration is trading at a lower price-to-earnings ratio than Sportsman’s Warehouse, indicating that it is currently the more affordable of the two stocks.
Summary
Sportsman’s Warehouse beats GrowGeneration on 7 of the 12 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 GrowGeneration
GrowGeneration Corp., through its subsidiaries, owns and operates retail hydroponic and organic gardening stores in the United States. The company engages in the marketing and distribution of nutrients, additives, growing media, lighting, and environmental control systems, as well as other indoor and outdoor growing products. It operates a chain of stores in California, Colorado, Michigan, Maine, Oklahoma, Oregon, Washington, Montana, New York, Ohio, Mississippi, Missouri, Arizona, Rhode Island, Florida, Massachusetts, Virginia, New Jersey, and New Mexico, as well as growgeneration.com, an online superstore for cultivators, a wholesale business for resellers, HRG Distribution, and benching, racking, and storage solutions and MMI. The company was formerly known as Easylife Corp. GrowGeneration Corp. was founded in 2008 and is based in Greenwood Village, Colorado.
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