Critical Review: Sportsman’s Warehouse (NASDAQ:SPWH) and Canada Goose (NYSE:GOOS)

Canada Goose (NYSE:GOOS) and Sportsman’s Warehouse (NASDAQ:SPWH) are both small-cap retail/wholesale companies, but which is the superior business? We will compare the two businesses based on the strength of their earnings, valuation, profitability, analyst recommendations, institutional ownership, risk and dividends.

Valuation and Earnings

This table compares Canada Goose and Sportsman’s Warehouse”s top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Canada Goose	$969.08 million	1.30	$68.13 million	$0.18	72.00
Sportsman’s Warehouse	$1.20 billion	0.05	-$33.06 million	($0.97)	-1.51

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

Profitability

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

	Net Margins	Return on Equity	Return on Assets
Canada Goose	1.96%	15.35%	4.62%
Sportsman’s Warehouse	-3.05%	-7.20%	-1.72%

Analyst Recommendations

This is a summary of current recommendations for Canada Goose and Sportsman’s Warehouse, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Canada Goose	2	3	4	1	2.40
Sportsman’s Warehouse	1	1	5	0	2.57

Canada Goose currently has a consensus price target of $15.00, indicating a potential upside of 15.74%. Sportsman’s Warehouse has a consensus price target of $2.88, indicating a potential upside of 96.92%. Given Sportsman’s Warehouse’s stronger consensus rating and higher possible upside, analysts clearly believe Sportsman’s Warehouse is more favorable than Canada Goose.

Risk and Volatility

Canada Goose has a beta of 1.75, indicating that its share price is 75% more volatile than the S&P 500. Comparatively, Sportsman’s Warehouse has a beta of 0.57, indicating that its share price is 43% less volatile than the S&P 500.

Institutional & Insider Ownership

83.6% of Canada Goose shares are held by institutional investors. Comparatively, 83.0% of Sportsman’s Warehouse shares are held by institutional investors. 0.5% of Canada Goose shares are held by company insiders. Comparatively, 2.7% of Sportsman’s Warehouse shares are held by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock is poised for long-term growth.

Summary

Canada Goose beats Sportsman’s Warehouse on 10 of the 15 factors compared between the two stocks.

About Canada Goose

Canada Goose Holdings Inc., together with its subsidiaries, designs, manufactures, and sells performance luxury apparel for men, women, youth, children, and babies in Canada, the United States, Asia Pacific, Europe, the Middle East, and Africa. The company operates through three segments: Direct-to-Consumer, Wholesale, and Other. It offers parkas, lightweight down jackets, rainwear, windwear, apparel, fleece, footwear, and accessories for fall, winter, and spring seasons. The company operates through national e-commerce markets and directly operated retail stores. Canada Goose Holdings Inc. was founded in 1957 and is headquartered in Toronto, Canada.

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.