Critical Analysis: Sportsman’s Warehouse (NASDAQ:SPWH) and Shoe Carnival (NASDAQ:SCVL)

Sportsman’s Warehouse (NASDAQ:SPWH) and Shoe Carnival (NASDAQ:SCVL) are both small-cap retail/wholesale companies, but which is the superior investment? We will contrast the two companies based on the strength of their profitability, earnings, dividends, analyst recommendations, risk, valuation and institutional ownership.

Insider and Institutional Ownership

83.0% of Sportsman’s Warehouse shares are held by institutional investors. Comparatively, 66.1% of Shoe Carnival shares are held by institutional investors. 1.8% of Sportsman’s Warehouse shares are held by insiders. Comparatively, 35.5% of Shoe Carnival shares are held by insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company will outperform the market over the long term.

Analyst Recommendations

This is a breakdown of current recommendations and price targets for Sportsman’s Warehouse and Shoe Carnival, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Sportsman’s Warehouse	1	1	4	0	2.50
Shoe Carnival	0	2	0	1	2.67

Sportsman’s Warehouse currently has a consensus price target of $2.95, suggesting a potential upside of 114.55%. Shoe Carnival has a consensus price target of $22.00, suggesting a potential upside of 21.71%. Given Sportsman’s Warehouse’s higher probable upside, equities research analysts plainly believe Sportsman’s Warehouse is more favorable than Shoe Carnival.

Earnings and Valuation

This table compares Sportsman’s Warehouse and Shoe Carnival”s revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Sportsman’s Warehouse	$1.20 billion	0.04	-$33.06 million	($0.97)	-1.42
Shoe Carnival	$1.20 billion	0.41	$73.77 million	$2.10	8.61

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

Profitability

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

	Net Margins	Return on Equity	Return on Assets
Sportsman’s Warehouse	-3.05%	-7.20%	-1.72%
Shoe Carnival	5.06%	8.75%	5.05%

Risk & Volatility

Sportsman’s Warehouse has a beta of 0.6, suggesting that its share price is 40% less volatile than the S&P 500. Comparatively, Shoe Carnival has a beta of 1.34, suggesting that its share price is 34% more volatile than the S&P 500.

Summary

Shoe Carnival beats Sportsman’s Warehouse on 12 of the 15 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 Shoe Carnival

Shoe Carnival, Inc., together with its subsidiaries, operates as a family footwear retailer in the United States. The company offers range of dress, casual, work, and athletic shoes, as well as sandals and boots for men, women, and children; and various accessories. The company also operates stores, and sells its products through online shopping at shoecarnival.com, as well as through mobile app. Shoe Carnival, Inc. was founded in 1978 and is headquartered in Evansville, Indiana.