Critical Contrast: Sportsman’s Warehouse (NASDAQ:SPWH) versus Newegg Commerce (NASDAQ:NEGG)

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

Risk and Volatility

Newegg Commerce has a beta of 3.44, indicating that its stock price is 244% more volatile than the S&P 500. Comparatively, Sportsman’s Warehouse has a beta of 0.42, indicating that its stock price is 58% less volatile than the S&P 500.

Insider and Institutional Ownership

0.5% of Newegg Commerce shares are owned by institutional investors. Comparatively, 83.0% of Sportsman’s Warehouse shares are owned by institutional investors. 22.9% of Newegg Commerce shares are owned by insiders. Comparatively, 3.8% of Sportsman’s Warehouse shares are owned by insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock will outperform the market over the long term.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
Newegg Commerce	N/A	N/A	N/A
Sportsman’s Warehouse	-4.17%	-10.68%	-2.39%

Analyst Recommendations

This is a breakdown of current ratings for Newegg Commerce and Sportsman’s Warehouse, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Newegg Commerce	1	0	0	0	1.00
Sportsman’s Warehouse	1	2	2	0	2.20

Sportsman’s Warehouse has a consensus target price of $2.58, indicating a potential upside of 118.00%. Given Sportsman’s Warehouse’s stronger consensus rating and higher probable upside, analysts clearly believe Sportsman’s Warehouse is more favorable than Newegg Commerce.

Valuation and Earnings

This table compares Newegg Commerce and Sportsman’s Warehouse”s gross revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Newegg Commerce	$1.44 million	487.63	-$4.88 million	N/A	N/A
Sportsman’s Warehouse	$1.21 billion	0.04	-$50.06 million	($1.30)	-0.91

Newegg Commerce has higher earnings, but lower revenue than Sportsman’s Warehouse.

Summary

Newegg Commerce beats Sportsman’s Warehouse on 7 of the 12 factors compared between the two stocks.

About Newegg Commerce

Newegg Commerce, Inc. operates as an electronics-focused e-retailer in North America. The company offers desktops, laptops, gaming laptops, peripherals, and accessories; CPU/processors, graphic cards, motherboards, storage devices, and computer accessories; home video and audio, headphones, pro audio/video, cellphones, wearables, and digital cameras; display and printing, office technology furniture, office supplies, and mailing and inventory supplies; and software, digital downloads, warranty and services, 3rd party gift cards, and entertainment products. It also provides Xbox, PlayStation, home networking, server and components, smart home products, car electronics, motorcycles and ATV, wheels and tires, home improvement tools, home appliances, kitchen utensils, outdoor and garden furniture, fitness, and sports and health products. The company operates B2C platforms, including Newegg.com, Newegg.ca, and Newegg Global, as well as mobile apps; and B2B platforms comprising NeweggBusiness.com. The company was founded in 2001 and is headquartered in City of Industry, California. Newegg Commerce, Inc. is a subsidiary of Hangzhou Liaison Interactive Information Technology Co., Ltd.

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.