Head-To-Head Contrast: GrowGeneration (NASDAQ:GRWG) & Sportsman’s Warehouse (NASDAQ:SPWH)

Sportsman’s Warehouse (NASDAQ:SPWH) and GrowGeneration (NASDAQ:GRWG) are both small-cap consumer discretionary companies, but which is the superior investment? We will contrast the two businesses based on the strength of their analyst recommendations, risk, valuation, dividends, earnings, profitability and institutional ownership.

Profitability

This table compares Sportsman’s Warehouse and GrowGeneration’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%
GrowGeneration	-10.07%	-17.44%	-11.52%

Earnings and Valuation

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

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Sportsman’s Warehouse	$1.21 billion	0.04	-$50.06 million	($1.23)	-1.06
GrowGeneration	$161.74 million	0.60	-$24.05 million	($0.27)	-6.09

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

Analyst Recommendations

This is a breakdown of recent ratings and target prices for Sportsman’s Warehouse and GrowGeneration, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Sportsman’s Warehouse	1	2	1	0	2.00
GrowGeneration	1	1	1	0	2.00

Sportsman’s Warehouse presently has a consensus price target of $2.12, suggesting a potential upside of 63.46%. GrowGeneration has a consensus price target of $2.50, suggesting a potential upside of 51.98%. Given Sportsman’s Warehouse’s higher possible upside, equities analysts clearly believe Sportsman’s Warehouse is more favorable than GrowGeneration.

Volatility and Risk

Sportsman’s Warehouse has a beta of 0.42, indicating that its share price is 58% less volatile than the S&P 500. Comparatively, GrowGeneration has a beta of 2.56, indicating that its share price is 156% more volatile than the S&P 500.

Insider and Institutional Ownership

83.0% of Sportsman’s Warehouse shares are owned by institutional investors. Comparatively, 36.0% of GrowGeneration shares are owned by institutional investors. 3.8% of Sportsman’s Warehouse shares are owned by insiders. Comparatively, 8.1% of GrowGeneration shares are owned by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company is poised for long-term growth.

Summary

Sportsman’s Warehouse beats GrowGeneration on 7 of the 12 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 GrowGeneration

GrowGeneration Corp., through its subsidiaries, owns and operates retail hydroponic and organic gardening stores in the United States. The company engages in the marketing and distribution of nutrients, additives, growing media, lighting, and environmental control systems, as well as other indoor and outdoor growing products. It operates a chain of stores in California, Colorado, Michigan, Maine, Oklahoma, Oregon, Washington, Montana, New York, Ohio, Mississippi, Missouri, Arizona, Rhode Island, Florida, Massachusetts, Virginia, New Jersey, and New Mexico, as well as growgeneration.com, an online superstore for cultivators, a wholesale business for resellers, HRG Distribution, and benching, racking, and storage solutions and MMI. The company was formerly known as Easylife Corp. GrowGeneration Corp. was founded in 2008 and is based in Greenwood Village, Colorado.