Critical Contrast: Zumiez (NASDAQ:ZUMZ) vs. Immersion (NASDAQ:IMMR)

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

Volatility & Risk

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

Valuation & Earnings

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

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Immersion	$1.73 billion	0.14	$4.52 million	$0.14	54.00
Zumiez	$929.06 million	0.32	$13.38 million	$0.83	21.33

Zumiez has lower revenue, but higher earnings 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.

Institutional & Insider Ownership

60.6% of Immersion shares are owned by institutional investors. Comparatively, 95.5% of Zumiez shares are owned by institutional investors. 12.0% of Immersion shares are owned by company insiders. Comparatively, 24.3% of Zumiez shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock is poised for long-term growth.

Profitability

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

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

Analyst Recommendations

This is a breakdown of current ratings and recommmendations for Immersion and Zumiez, as provided by MarketBeat.com.

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

Immersion currently has a consensus target price of $13.50, indicating a potential upside of 78.57%. Zumiez has a consensus target price of $18.00, indicating a potential upside of 1.69%. Given Immersion’s stronger consensus rating and higher probable upside, equities research analysts plainly believe Immersion is more favorable than Zumiez.

Summary

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

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.

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.