Good Times Restaurants (NASDAQ: GTIM) and Kona Grill (NASDAQ:KONA) are both small-cap retail/wholesale companies, but which is the better stock? We will contrast the two businesses based on the strength of their valuation, dividends, institutional ownership, profitability, analyst recommendations, earnings and risk.
Valuation & Earnings
This table compares Good Times Restaurants and Kona Grill’s gross revenue, earnings per share (EPS) and valuation.
|Gross Revenue||Price/Sales Ratio||NetIncome||Earnings Per Share||Price/Earnings Ratio|
|Good Times Restaurants||$64.44 million||0.49||-$1.32 million||($0.14)||-18.21|
|Kona Grill||$169.52 million||0.13||-$21.62 million||($2.67)||-0.84|
Good Times Restaurants has higher revenue, but lower earnings than Kona Grill. Good Times Restaurants is trading at a lower price-to-earnings ratio than Kona Grill, indicating that it is currently the more affordable of the two stocks.
This table compares Good Times Restaurants and Kona Grill’s net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
|Good Times Restaurants||-2.25%||-4.44%||-3.35%|
Volatility & Risk
Good Times Restaurants has a beta of 0.81, indicating that its stock price is 19% less volatile than the S&P 500. Comparatively, Kona Grill has a beta of 0.32, indicating that its stock price is 68% less volatile than the S&P 500.
Insider and Institutional Ownership
32.9% of Good Times Restaurants shares are owned by institutional investors. Comparatively, 46.3% of Kona Grill shares are owned by institutional investors. 8.4% of Good Times Restaurants shares are owned by insiders. Comparatively, 29.2% of Kona Grill shares are owned by insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a company is poised for long-term growth.
This is a summary of current recommendations and price targets for Good Times Restaurants and Kona Grill, as reported by MarketBeat.com.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|Good Times Restaurants||0||0||1||0||3.00|
Good Times Restaurants currently has a consensus price target of $6.00, indicating a potential upside of 135.29%. Kona Grill has a consensus price target of $6.17, indicating a potential upside of 174.07%. Given Kona Grill’s higher probable upside, analysts plainly believe Kona Grill is more favorable than Good Times Restaurants.
Good Times Restaurants beats Kona Grill on 8 of the 13 factors compared between the two stocks.
Good Times Restaurants Company Profile
Good Times Restaurants Inc. operates and franchises Good Times Burgers & Frozen Custard (Good Times) restaurants and Bad Daddy’s Burger Bar concept (Bad Daddy’s). The Company operates through two segments: Good Times Burgers and Frozen Custard restaurants, and Bad Daddy’s Burger Bar restaurants. Good Times is a quick service restaurant concept. The menu of a Good Times restaurant includes hamburgers, cheeseburgers, chicken sandwiches, French fries, onion rings, soft drinks and frozen custard products. Its breakfast menu includes breakfast burritos, orange juice and coffee. Bad Daddy’s operates in the burger casual dining sector and is chef driven, full service, full bar concept. Its menu consists of burgers, salads, sandwiches and appetizers. Its bar focuses on local, craft microbrew beers and specialty cocktails. The Company operates through its subsidiaries, Good Times Drive Thru, Inc., BD of Colorado, LLC, Bad Daddy’s Franchise Development, LLC and Bad Daddy’s International, LLC.
Kona Grill Company Profile
Kona Grill, Inc. owns and operates upscale casual dining restaurants under the name Kona Grill. The Company owns and operates approximately 40 restaurants in 20 states throughout the United States and Puerto Rico. Its high-volume upscale casual restaurants feature a global menu of contemporary American favorites and sushi. Its menu items are prepared from scratch at each restaurant location and incorporate over 40 signature sauces and dressings. It also offers a full service bar offering a range assortment of wines, specialty cocktails and beers. Its restaurants seat an average of approximately 290 customers and comprise multiple dining areas. Its dining area, full-service bar, indoor/outdoor patio and sushi bar provide a choice of atmospheres and a range of environments. It locates its restaurants in various areas, such as retail centers, shopping malls, urban entertainment districts and lifestyle centers that are situated near commercial office space and residential housing.
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