Critical Comparison: Immersion (NASDAQ:IMMR) vs. America’s Car-Mart (NASDAQ:CRMT)

America’s Car-Mart (NASDAQ:CRMT) and Immersion (NASDAQ:IMMR) are both small-cap consumer discretionary companies, but which is the superior stock? We will compare the two businesses based on the strength of their profitability, dividends, risk, earnings, analyst recommendations, valuation and institutional ownership.

Insider & Institutional Ownership

89.1% of America’s Car-Mart shares are owned by institutional investors. Comparatively, 60.6% of Immersion shares are owned by institutional investors. 18.4% of America’s Car-Mart shares are owned by company insiders. Comparatively, 10.6% of Immersion shares are owned by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a company is poised for long-term growth.

Valuation & Earnings

This table compares America’s Car-Mart and Immersion”s gross revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
America’s Car-Mart	$1.28 billion	0.01	-$139.11 million	($23.80)	-0.08
Immersion	$1.73 billion	0.14	$4.52 million	$0.14	52.86

Immersion has higher revenue and earnings than America’s Car-Mart. America’s Car-Mart is trading at a lower price-to-earnings ratio than Immersion, indicating that it is currently the more affordable of the two stocks.

Profitability

This table compares America’s Car-Mart and Immersion’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
America’s Car-Mart	-18.21%	-15.19%	-4.73%
Immersion	0.26%	0.80%	0.35%

Volatility and Risk

America’s Car-Mart has a beta of 1.27, indicating that its share price is 27% more volatile than the S&P 500. Comparatively, Immersion has a beta of 1.02, indicating that its share price is 2% more volatile than the S&P 500.

Analyst Recommendations

This is a breakdown of recent recommendations for America’s Car-Mart and Immersion, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
America’s Car-Mart	1	2	0	0	1.67
Immersion	0	2	1	0	2.33

America’s Car-Mart currently has a consensus price target of $14.00, suggesting a potential upside of 636.84%. Immersion has a consensus price target of $13.50, suggesting a potential upside of 82.43%. Given America’s Car-Mart’s higher possible upside, equities research analysts clearly believe America’s Car-Mart is more favorable than Immersion.

Summary

Immersion beats America’s Car-Mart on 10 of the 14 factors compared between the two stocks.

About America’s Car-Mart

America’s Car-Mart, Inc., through its subsidiaries, operates as an automotive retailer for the used car market in the United States. It primarily sells older model used vehicles and provides financing for its customers. The company was founded in 1981 and is headquartered in Rogers, Arkansas.

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.