Sportsman’s Warehouse (NASDAQ:SPWH) & Williams-Sonoma (NYSE:WSM) Critical Analysis

Sportsman’s Warehouse (NASDAQ:SPWH) and Williams-Sonoma (NYSE:WSM) are both consumer discretionary companies, but which is the superior stock? We will compare the two companies based on the strength of their analyst recommendations, valuation, dividends, institutional ownership, profitability, earnings and risk.

Institutional and Insider Ownership

83.0% of Sportsman’s Warehouse shares are owned by institutional investors. Comparatively, 99.3% of Williams-Sonoma shares are owned by institutional investors. 3.8% of Sportsman’s Warehouse shares are owned by insiders. Comparatively, 1.1% of Williams-Sonoma shares are owned by insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a company will outperform the market over the long term.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
Sportsman’s Warehouse	-3.94%	-10.50%	-2.29%
Williams-Sonoma	14.73%	53.48%	20.50%

Volatility and Risk

Sportsman’s Warehouse has a beta of 0.44, suggesting that its share price is 56% less volatile than the S&P 500. Comparatively, Williams-Sonoma has a beta of 1.48, suggesting that its share price is 48% more volatile than the S&P 500.

Analyst Recommendations

This is a breakdown of recent ratings and price targets for Sportsman’s Warehouse and Williams-Sonoma, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Sportsman’s Warehouse	1	2	1	0	2.00
Williams-Sonoma	0	8	10	0	2.56

Sportsman’s Warehouse presently has a consensus price target of $2.12, suggesting a potential upside of 104.33%. Williams-Sonoma has a consensus price target of $245.56, suggesting a potential downside of 1.52%. Given Sportsman’s Warehouse’s higher probable upside, equities research analysts plainly believe Sportsman’s Warehouse is more favorable than Williams-Sonoma.

Earnings and Valuation

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

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Sportsman’s Warehouse	$1.21 billion	0.03	-$50.06 million	($1.23)	-0.85
Williams-Sonoma	$7.81 billion	3.76	$1.09 billion	$9.77	25.52

Williams-Sonoma has higher revenue and earnings than Sportsman’s Warehouse. Sportsman’s Warehouse is trading at a lower price-to-earnings ratio than Williams-Sonoma, indicating that it is currently the more affordable of the two stocks.

Summary

Williams-Sonoma beats Sportsman’s Warehouse on 11 of the 13 factors compared between the two stocks.

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.

About Williams-Sonoma

Williams-Sonoma, Inc. operates as an omni-channel specialty retailer of various products for home. It offers cooking, dining, and entertaining products, such as cookware, tools, electrics, cutlery, tabletop and bar, outdoor, furniture, and a library of cookbooks under the Williams Sonoma Home brand, as well as home furnishings and decorative accessories under the Williams Sonoma lifestyle brand; and furniture, bedding, lighting, rugs, table essentials, and decorative accessories under the Pottery Barn brand. The company also provides home decor products under the West Elm brand; kids accessories under the Pottery Barn Kids brand; and an organic bedding to multi-purpose furniture under the Pottery Barn Teen brand. In addition, it offers made-to-order lighting, hardware, furniture, and home decors inspired by history under the Rejuvenation brand; personalized products and custom gifts under the Mark and Graham brand; and colorful and vintage-inspired heirloom products under the GreenRow, as well as operates a 3-D imaging and augmented reality platform for the home furnishings and décor industry under the Outward brand. The company markets its products through e-commerce websites, direct-mail catalogs, and retail stores. Williams-Sonoma, Inc. was founded in 1956 and is headquartered in San Francisco, California.