Head to Head Review: Immersion (NASDAQ:IMMR) versus Sportsman’s Warehouse (NASDAQ:SPWH)

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

Insider and Institutional Ownership

60.6% of Immersion shares are owned by institutional investors. Comparatively, 83.0% of Sportsman’s Warehouse shares are owned by institutional investors. 10.6% of Immersion 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 stock is poised for long-term growth.

Analyst Ratings

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

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

Immersion currently has a consensus target price of $13.50, suggesting a potential upside of 83.18%. Sportsman’s Warehouse has a consensus target price of $2.12, suggesting a potential upside of 71.37%. Given Immersion’s stronger consensus rating and higher possible upside, research analysts clearly believe Immersion is more favorable than Sportsman’s Warehouse.

Profitability

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

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

Earnings & Valuation

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

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Immersion	$1.73 billion	0.14	$4.52 million	$0.34	21.68
Sportsman’s Warehouse	$1.21 billion	0.04	-$50.06 million	($1.23)	-1.01

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.

Volatility and Risk

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

Summary

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

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.

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.