Critical Analysis: Clarus (NASDAQ:CLAR) versus Newton Golf (NASDAQ:NWTG)

Clarus (NASDAQ:CLAR) and Newton Golf (NASDAQ:NWTG) 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 analyst recommendations, earnings, risk, dividends, profitability, institutional ownership and valuation.

Institutional & Insider Ownership

90.3% of Clarus shares are held by institutional investors. Comparatively, 0.5% of Newton Golf shares are held by institutional investors. 22.3% of Clarus shares are held by insiders. Comparatively, 8.4% of Newton Golf shares are held by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company will outperform the market over the long term.

Volatility & Risk

Clarus has a beta of 1.15, meaning that its share price is 15% more volatile than the S&P 500. Comparatively, Newton Golf has a beta of 3.57, meaning that its share price is 257% more volatile than the S&P 500.

Earnings & Valuation

This table compares Clarus and Newton Golf”s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Clarus	$250.44 million	0.41	-$46.56 million	($1.21)	-2.22
Newton Golf	$8.14 million	0.62	-$6.02 million	($1.75)	-0.63

Newton Golf has lower revenue, but higher earnings than Clarus. Clarus is trading at a lower price-to-earnings ratio than Newton Golf, indicating that it is currently the more affordable of the two stocks.

Profitability

This table compares Clarus and Newton Golf’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Clarus	-18.59%	-0.82%	-0.65%
Newton Golf	-74.01%	-165.40%	-103.33%

Analyst Ratings

This is a summary of recent ratings and recommmendations for Clarus and Newton Golf, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Clarus	1	2	1	0	2.00
Newton Golf	1	0	0	0	1.00

Clarus currently has a consensus price target of $3.75, suggesting a potential upside of 39.41%. Given Clarus’ stronger consensus rating and higher possible upside, analysts plainly believe Clarus is more favorable than Newton Golf.

Summary

Clarus beats Newton Golf on 10 of the 14 factors compared between the two stocks.

About Clarus

Clarus Corporation designs, develops, manufactures, and distributes outdoor equipment and lifestyle products in the United States and internationally. The company operates through two segments, Outdoor and Adventure. The Outdoor segment offers apparels, such as shells, insulation, midlayers, pants, and logowear; rock-climbing footwear and equipment, including carabiners, protection devices, harnesses, belay devices, helmets, and ice-climbing gears; technical backpacks and day packs; trekking poles; headlamps and lanterns; gloves and mittens; and skis, ski poles, ski skins, avalanche airbag systems, avalanche transceivers, shovels, and probes. This segment offers its products for climbing, mountaineering, trail running, backpacking, skiing, and other outdoor recreation activities under the Black Diamond Equipment and PIEPS brands. The Adventure segment offers engineered automotive roof racks, trays, mounting systems, luggage boxes, carriers, recovery boards, and accessories under the Rhino-Rack brand; and overlanding and off-road vehicle recovery and extraction tracks for the overland and the off-road market under the MAXTRAX brand, as well as sells and retails overlanding and off-road vehicle under the TRED brand. It markets and distributes its products through independent specialty stores and specialty chains, sporting goods and outdoor recreation stores, distributors, and original equipment manufacturers; and independent distributors, as well as through its websites. The company was formerly known as Black Diamond, Inc. and changed its name to Clarus Corporation in August 2017. The company was founded in 1957 and is headquartered in Salt Lake City, Utah.

About Newton Golf

Sacks Parente Golf, Inc. (“SPG”) is a technology-forward golf company, with a growing portfolio of golf products, including putting instruments, golf shafts, golf grips, and other golf-related products. In April 2022, in consideration of our growth opportunities in shaft technologies, we expanded our manufacturing business to include advanced premium golf shafts by opening a new shaft manufacturing facility in St. Joseph, MO. We intend to manufacture and assemble substantially all products in the United States. We anticipate expanding into golf apparel and other golf related product lines to enhance our growth. Our future expansions may include broadening our offerings through mergers, acquisitions or internal developments of product lines that are complementary to our premium brand. Product Portfolio Characteristics We design, manufacture and sell technology-forward, high-quality golf equipment, which is comprised of putting instruments, golf shafts, golf grips and related product groups. We design our golf products to fit golfers of all skill levels, amateur and professional, and our products are designed with the goal of conforming to the Rules of Golf as published by the United States Golf Association (“USGA”) and the ruling authority (“The R&A”). Our Products Our equipment includes putting instruments, golf shafts and grips. Our putting instruments are generally made of steel, aluminum, titanium alloys, carbon fiber, tungsten, and various other materials, including our patented magnesium face plate technologies. All of our products are currently sold under the SPG brand, but we intend to private label and sell certain components to interested third parties. Our shaft and putter technology has been shown by The Golf Lab, a Canadian golf research and education provider, to improve players’ ability to make putts, feel of the putter head, stroke, face angle at impact, and consistency for distance control. Our management believes that our proprietary shaft designs can enhance the performance of players’ putters as well as drivers and other golf clubs. Further, our management believes that these innovative designs, along with our proprietary manufacturing techniques, create performance improvements over traditional golf shafts. We were formed in 2018 as Sacks Parente Golf Company, LLC, a Delaware limited liability company. On March 18th, 2022, we converted into a Delaware corporation named Sacks Parente Golf, Inc. Sacks Parente Golf, Inc. 551 Calle San Pablo Camarillo, CA.