Financial Review: Immersion (NASDAQ:IMMR) versus Lulu’s Fashion Lounge (NASDAQ:LVLU)

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

Risk & Volatility

Immersion has a beta of 1.02, meaning that its stock price is 2% more volatile than the S&P 500. Comparatively, Lulu’s Fashion Lounge has a beta of 0.26, meaning that its stock price is 74% less volatile than the S&P 500.

Institutional & Insider Ownership

60.6% of Immersion shares are held by institutional investors. Comparatively, 73.8% of Lulu’s Fashion Lounge shares are held by institutional investors. 10.6% of Immersion shares are held by company insiders. Comparatively, 7.8% of Lulu’s Fashion Lounge shares are held by company insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock will outperform the market over the long term.

Profitability

This table compares Immersion and Lulu’s Fashion Lounge’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%
Lulu’s Fashion Lounge	-3.17%	-946.15%	-8.73%

Analyst Recommendations

This is a summary of recent ratings and recommmendations for Immersion and Lulu’s Fashion Lounge, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Immersion	0	2	1	0	2.33
Lulu’s Fashion Lounge	1	0	0	0	1.00

Immersion currently has a consensus target price of $13.50, suggesting a potential upside of 84.93%. Given Immersion’s stronger consensus rating and higher possible upside, analysts plainly believe Immersion is more favorable than Lulu’s Fashion Lounge.

Valuation & Earnings

This table compares Immersion and Lulu’s Fashion Lounge”s 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	$0.14	52.14
Lulu’s Fashion Lounge	$282.28 million	0.11	-$13.71 million	($2.94)	-3.51

Immersion has higher revenue and earnings than Lulu’s Fashion Lounge. Lulu’s Fashion Lounge 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 Lulu’s Fashion Lounge on 13 of the 14 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 Lulu’s Fashion Lounge

Lulu’s Fashion Lounge Holdings, Inc. engages in providing an online website for clothing. It offers retailing of women’s clothing, shoes, and accessories. The company was founded in 1996 and is headquartered in Chico, CA.