Smith & Wesson Brands (NASDAQ:SWBI) vs. TruGolf (NASDAQ:TRUG) Critical Analysis

TruGolf (NASDAQ:TRUG) and Smith & Wesson Brands (NASDAQ:SWBI) 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 risk, valuation, institutional ownership, analyst recommendations, earnings, profitability and dividends.

Institutional & Insider Ownership

3.2% of TruGolf shares are held by institutional investors. Comparatively, 59.3% of Smith & Wesson Brands shares are held by institutional investors. 5.8% of TruGolf shares are held by insiders. Comparatively, 2.3% of Smith & Wesson Brands shares are held by 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.

Risk and Volatility

TruGolf has a beta of -1.08, suggesting that its stock price is 208% less volatile than the S&P 500. Comparatively, Smith & Wesson Brands has a beta of 0.8, suggesting that its stock price is 20% less volatile than the S&P 500.

Valuation & Earnings

This table compares TruGolf and Smith & Wesson Brands”s top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
TruGolf	$18.88 million	0.03	-$15.23 million	($10.82)	-0.26
Smith & Wesson Brands	$523.84 million	1.24	$18.48 million	$0.54	26.84

Smith & Wesson Brands has higher revenue and earnings than TruGolf. TruGolf is trading at a lower price-to-earnings ratio than Smith & Wesson Brands, indicating that it is currently the more affordable of the two stocks.

Profitability

This table compares TruGolf and Smith & Wesson Brands’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
TruGolf	-55.27%	-132.15%	-24.75%
Smith & Wesson Brands	4.44%	6.60%	4.59%

Analyst Recommendations

This is a summary of recent ratings and price targets for TruGolf and Smith & Wesson Brands, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
TruGolf	1	0	0	0	1.00
Smith & Wesson Brands	0	2	1	0	2.33

Smith & Wesson Brands has a consensus target price of $16.50, suggesting a potential upside of 13.83%. Given Smith & Wesson Brands’ stronger consensus rating and higher probable upside, analysts clearly believe Smith & Wesson Brands is more favorable than TruGolf.

Summary

Smith & Wesson Brands beats TruGolf on 13 of the 14 factors compared between the two stocks.

About TruGolf

TruGolf Holdings, Inc., through its subsidiary, engages in the development and sale of indoor golf simulator hardware under the TruGolf Nevada brand for residential and commercial markets in the United States. It also provides E6 Connect software for use on other companies' hardware. The company was founded in 1982 and is headquartered in Centerville, Utah.

About Smith & Wesson Brands

Smith & Wesson Brands, Inc. is a holding company, which engages in the manufacture, design, and provision of firearms. Its portfolio includes handguns, long guns, handcuffs, suppressor, and other firearm-related products. The firm’s brands are Smith & Wesson, M&P, Thompson/Center Arms, and Gemtech. The company was founded by Horace Smith and Daniel Baird Wesson in 1852 and is headquartered in Maryville, TN.