Head to Head Analysis: Immersion (NASDAQ:IMMR) vs. Petco Health and Wellness (NASDAQ:WOOF)

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

Analyst Ratings

This is a breakdown of recent ratings and recommmendations for Petco Health and Wellness and Immersion, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Petco Health and Wellness	2	5	1	1	2.11
Immersion	0	2	1	0	2.33

Petco Health and Wellness currently has a consensus price target of $3.42, suggesting a potential upside of 53.36%. Immersion has a consensus price target of $13.50, suggesting a potential upside of 81.70%. Given Immersion’s stronger consensus rating and higher possible upside, analysts clearly believe Immersion is more favorable than Petco Health and Wellness.

Profitability

This table compares Petco Health and Wellness and Immersion’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Petco Health and Wellness	0.51%	3.44%	0.78%
Immersion	0.60%	1.83%	0.82%

Insider & Institutional Ownership

60.6% of Immersion shares are held by institutional investors. 6.5% of Petco Health and Wellness shares are held by company insiders. Comparatively, 10.6% of Immersion shares are held by company insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company is poised for long-term growth.

Earnings and Valuation

This table compares Petco Health and Wellness and Immersion”s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Petco Health and Wellness	$5.97 billion	0.12	$9.07 million	$0.10	22.30
Immersion	$1.73 billion	0.14	$4.52 million	$0.34	21.85

Petco Health and Wellness has higher revenue and earnings than Immersion. Immersion is trading at a lower price-to-earnings ratio than Petco Health and Wellness, indicating that it is currently the more affordable of the two stocks.

Volatility and Risk

Petco Health and Wellness has a beta of 1.59, indicating that its stock price is 59% more volatile than the S&P 500. Comparatively, Immersion has a beta of 1.01, indicating that its stock price is 1% more volatile than the S&P 500.

Summary

Immersion beats Petco Health and Wellness on 8 of the 14 factors compared between the two stocks.

About Petco Health and Wellness

Petco Health and Wellness Company, Inc., operates as a health and wellness company, focuses on enhancing the lives of pets, pet parents, and its Petco partners in the United States, Mexico, and Puerto Rico. The company provides veterinary care, grooming, training, tele-health, and Vital Care and pet health insurance services, as well as veterinary services through Vetco mobile clinics. It also offers pet consumables, supplies, and services through its petco.com, petcoach.co, petinsurancequotes.com, and pupbox.com websites. The company offers its products under the WholeHearted, Reddy, and Well & Good brands. Petco Health and Wellness Company, Inc. was founded in 1965 and is headquartered in San Diego, California.

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.