Analyzing Immersion (NASDAQ:IMMR) & Zumiez (NASDAQ:ZUMZ)

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

Institutional and Insider Ownership

95.5% of Zumiez shares are held by institutional investors. Comparatively, 60.6% of Immersion shares are held by institutional investors. 24.3% of Zumiez shares are held by company insiders. Comparatively, 10.6% of Immersion shares are held by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock is poised for long-term growth.

Analyst Recommendations

This is a summary of current ratings and price targets for Zumiez and Immersion, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Zumiez	1	2	0	0	1.67
Immersion	0	2	1	0	2.33

Immersion has a consensus target price of $13.50, suggesting a potential upside of 75.10%. Given Immersion’s stronger consensus rating and higher probable upside, analysts clearly believe Immersion is more favorable than Zumiez.

Risk & Volatility

Zumiez has a beta of 1, indicating that its stock price has a similar volatility profile to the S&P 500.Comparatively, Immersion has a beta of 1.02, indicating that its stock price is 2% more volatile than the S&P 500.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
Zumiez	1.54%	4.24%	2.05%
Immersion	0.26%	0.80%	0.35%

Earnings & Valuation

This table compares Zumiez and Immersion”s revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Zumiez	$929.06 million	0.33	$13.38 million	$0.83	21.72
Immersion	$1.73 billion	0.15	$4.52 million	$0.14	55.07

Zumiez has higher earnings, but lower revenue than Immersion. Zumiez is trading at a lower price-to-earnings ratio than Immersion, indicating that it is currently the more affordable of the two stocks.

Summary

Zumiez beats Immersion on 8 of the 14 factors compared between the two stocks.

About Zumiez

Zumiez Inc. operates as a specialty retailer of apparel, footwear, accessories, and hardgoods for young men and women. The company provides hardgoods, including skateboards, snowboards, bindings, components, and other equipment. It operates stores in the United States, Canada, Europe, and Australia under the names of Zumiez, Blue Tomato, and Fast Times. It operates zumiez.com, zumiez.ca, blue-tomato.com, and fasttimes.com.au e-commerce websites. Zumiez Inc. was founded in 1978 and is headquartered in Lynnwood, Washington.

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.