Skullcandy (NASDAQ: SKUL) and Vuzix Corporation (NASDAQ:VUZI) are both consumer discretionary companies, but which is the superior stock? We will contrast the two businesses based on the strength of their institutional ownership, profitabiliy, dividends, valuation, earnings, risk and analyst recommendations.

Analyst Recommendations

This is a breakdown of current recommendations for Skullcandy and Vuzix Corporation, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Skullcandy 0 2 1 0 2.33
Vuzix Corporation 0 0 2 0 3.00

Skullcandy currently has a consensus price target of $6.18, suggesting a potential downside of 2.60%. Vuzix Corporation has a consensus price target of $10.50, suggesting a potential upside of 73.55%. Given Vuzix Corporation’s stronger consensus rating and higher probable upside, analysts plainly believe Vuzix Corporation is more favorable than Skullcandy.

Earnings & Valuation

This table compares Skullcandy and Vuzix Corporation’s top-line revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Skullcandy N/A N/A N/A $0.07 90.58
Vuzix Corporation $2.97 million 41.57 -$18.05 million ($1.20) -5.04

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

Profitability

This table compares Skullcandy and Vuzix Corporation’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Skullcandy 0.72% 1.23% 1.00%
Vuzix Corporation -660.74% -151.81% -114.81%

Risk & Volatility

Skullcandy has a beta of 1.24, suggesting that its share price is 24% more volatile than the S&P 500. Comparatively, Vuzix Corporation has a beta of 0.22, suggesting that its share price is 78% less volatile than the S&P 500.

Insider and Institutional Ownership

46.7% of Skullcandy shares are owned by institutional investors. Comparatively, 10.3% of Vuzix Corporation shares are owned by institutional investors. 7.7% of Skullcandy shares are owned by insiders. Comparatively, 22.9% of Vuzix Corporation shares are owned by insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock is poised for long-term growth.

Summary

Skullcandy beats Vuzix Corporation on 6 of the 11 factors compared between the two stocks.

About Skullcandy

Skullcandy, Inc. creates audio experiences through its Skullcandy and Astro Gaming brands. The Company operates in two segments: Domestic and International. The Domestic segment consists of Skullcandy and Astro Gaming product sales to customers in the United States. The International segment includes Skullcandy product sales to customers in Europe, Asia, Canada Mexico, and all other geographic areas outside the United States that are served by the Company’s International operations. The Company focuses its product offerings in two categories: audio and gaming. The Company primarily operates in the consumer products category in which the Company develops and distributes headphones and other audio products. Astro Gaming creates premium video gaming equipment for professional gamers, leagues, and gaming enthusiasts. Skullcandy brand creates various audio and gaming products.

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