Noodles & Company (NASDAQ:NDLS – Get Free Report) and Rave Restaurant Group (NASDAQ:RAVE – Get Free Report) are both small-cap consumer cyclical companies, but which is the better investment? We will compare the two businesses based on the strength of their institutional ownership, profitability, analyst recommendations, dividends, valuation, earnings and risk.
Analyst Ratings
This is a summary of recent ratings for Noodles & Company and Rave Restaurant Group, as reported by MarketBeat.com.
Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score | |
Noodles & Company | 0 | 1 | 2 | 0 | 2.67 |
Rave Restaurant Group | 0 | 0 | 0 | 0 | N/A |
Noodles & Company currently has a consensus target price of $3.67, suggesting a potential upside of 213.39%. Given Noodles & Company’s higher possible upside, equities research analysts clearly believe Noodles & Company is more favorable than Rave Restaurant Group.
Institutional and Insider Ownership
Earnings & Valuation
This table compares Noodles & Company and Rave Restaurant Group”s revenue, earnings per share and valuation.
Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio | |
Noodles & Company | $500.92 million | 0.11 | -$9.86 million | ($0.29) | -4.03 |
Rave Restaurant Group | $12.15 million | 3.31 | $2.47 million | $0.15 | 18.40 |
Rave Restaurant Group has lower revenue, but higher earnings than Noodles & Company. Noodles & Company is trading at a lower price-to-earnings ratio than Rave Restaurant Group, indicating that it is currently the more affordable of the two stocks.
Volatility and Risk
Noodles & Company has a beta of 1.73, meaning that its stock price is 73% more volatile than the S&P 500. Comparatively, Rave Restaurant Group has a beta of 0.57, meaning that its stock price is 43% less volatile than the S&P 500.
Profitability
This table compares Noodles & Company and Rave Restaurant Group’s net margins, return on equity and return on assets.
Net Margins | Return on Equity | Return on Assets | |
Noodles & Company | -5.03% | -42.03% | -2.66% |
Rave Restaurant Group | 20.27% | 21.29% | 16.58% |
Summary
Rave Restaurant Group beats Noodles & Company on 8 of the 13 factors compared between the two stocks.
About Noodles & Company
Noodles & Company, a restaurant concept company, develops and operates fast-casual restaurants. It offers cooked-to-order dishes, including noodles and pasta, soups, salads, and appetizers. It operates company owned locations and franchise locations. The company was founded in 1995 and is based in Broomfield, Colorado.
About Rave Restaurant Group
Rave Restaurant Group, Inc., together with its subsidiaries, engages in the operation and franchising of pizza buffet, delivery/carry-out (delco), and express restaurants under the Pizza Inn and Pie Five trademarks in the United States and internationally. The company operates through three segments: Pizza Inn Franchising, Pie Five Franchising, and Company-Owned Restaurants. Its buffet restaurants are located in free standing buildings or strip centers in retail developments that offer dine-in, carryout, and catering services, as well as delivery services. The company’s delco restaurants provide delivery and carryout services and are located in shopping centers or other in-line retail developments. Its Express restaurants serve customers through various non-traditional points of sale and are located in convenience stores, food courts, college campuses, airport terminals, travel plazas, athletic facilities, or other commercial facilities. The company’s Pizza Inn Express restaurants serve customers through a non-traditional, licensed, pizza-only model called Pizza Inn Express, located at production-oriented facilities. In addition, it operates and franchises fast casual restaurants under the Pie Five Pizza Company or Pie Five trademarks. The company was formerly known as Pizza Inn Holdings, Inc. and changed its name to Rave Restaurant Group, Inc. in January 2015. Rave Restaurant Group, Inc. was founded in 1958 and is based in The Colony, Texas.
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