Contrasting Luckin Coffee (OTCMKTS:LKNCY) & Westrock Coffee (NASDAQ:WEST)

Luckin Coffee (OTCMKTS:LKNCY) and Westrock Coffee (NASDAQ:WEST) are both consumer staples companies, but which is the superior investment? We will compare the two companies based on the strength of their valuation, earnings, institutional ownership, analyst recommendations, profitability, dividends and risk.

Risk and Volatility

Luckin Coffee has a beta of -0.28, meaning that its stock price is 128% less volatile than the S&P 500. Comparatively, Westrock Coffee has a beta of 0.47, meaning that its stock price is 53% less volatile than the S&P 500.

Earnings & Valuation

This table compares Luckin Coffee and Westrock Coffee”s revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Luckin Coffee	$4.72 billion	2.13	$401.71 million	$1.76	20.11
Westrock Coffee	$850.73 million	0.53	-$80.30 million	($0.98)	-4.71

Luckin Coffee has higher revenue and earnings than Westrock Coffee. Westrock Coffee is trading at a lower price-to-earnings ratio than Luckin Coffee, indicating that it is currently the more affordable of the two stocks.

Analyst Ratings

This is a summary of current recommendations and price targets for Luckin Coffee and Westrock Coffee, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Luckin Coffee	0	1	1	0	2.50
Westrock Coffee	1	0	3	0	2.50

Luckin Coffee currently has a consensus target price of $52.00, suggesting a potential upside of 46.89%. Westrock Coffee has a consensus target price of $9.00, suggesting a potential upside of 94.81%. Given Westrock Coffee’s higher possible upside, analysts clearly believe Westrock Coffee is more favorable than Luckin Coffee.

Profitability

This table compares Luckin Coffee and Westrock Coffee’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Luckin Coffee	8.45%	33.69%	17.02%
Westrock Coffee	-8.58%	-98.07%	-4.26%

Institutional and Insider Ownership

0.5% of Luckin Coffee shares are held by institutional investors. Comparatively, 45.1% of Westrock Coffee shares are held by institutional investors. 2.7% of Luckin Coffee shares are held by company insiders. Comparatively, 27.7% of Westrock Coffee shares are held by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a company is poised for long-term growth.

Summary

Luckin Coffee beats Westrock Coffee on 8 of the 13 factors compared between the two stocks.

About Luckin Coffee

Luckin Coffee Inc. offers retail services of freshly brewed drinks, and pre-made food and beverage items in the People's Republic of China. It offers hot and iced freshly brewed coffee, such as Americano, Latte, Cappuccino, Macchiato, Flat White, and Mocha, as well as specialty coffee based on market and seasonal trends; coconut milk latte products; tea drinks; pre-made beverages; and pre-made food items, such as pastries, sandwiches, and snacks. In addition, the company offers Luckin Pop premium instant coffee and inspirational cups through mobile apps and e-commerce platforms. It operates pick-up stores, relax stores, and delivery kitchens under the Luckin brand, as well as Luckin mobile app, Weixin mini-program, and other third-party platforms for third-party payment channels. Further, the company offers technical and consultation services; and manufactures materials for products. Luckin Coffee Inc. was incorporated in 2017 and is headquartered in Xiamen, the People's Republic of China.

About Westrock Coffee

Westrock Coffee Company, LLC operates as an integrated coffee, tea, flavors, extracts, and ingredients solutions provider in the United States and internationally. It operates through two segments, Beverage Solutions, and Sustainable Sourcing & Traceability (SS&T). The Beverage Solutions segment provides various packaging, including branded and private label coffee in bags, fractional packs, and single serve cups, as well as extract solutions for applications in cold brew and ready-to-drink offerings. The SS&T segment engages in delivery and settlement of forward sales contracts for green coffee. The company offers coffee sourcing, supply chain management, product development, roasting, packaging, and distribution services to the retail, food service and restaurant, convenience store and travel center, non-commercial account, CPG, and hospitality industries. Westrock Coffee Company, LLC was founded in 2009 and is headquartered in Little Rock, Arkansas.