Shake Shack (NYSE:SHAK) and Noodles & Company (NASDAQ:NDLS) Head to Head Survey

Shake Shack (NYSE:SHAK) and Noodles & Company (NASDAQ:NDLS) are both retail/wholesale companies, but which is the better investment? We will compare the two companies based on the strength of their valuation, institutional ownership, profitability, earnings, dividends, risk and analyst recommendations.

Profitability

This table compares Shake Shack and Noodles & Company’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Shake Shack	3.16%	11.08%	3.23%
Noodles & Company	-9.20%	N/A	-8.54%

Analyst Recommendations

This is a breakdown of recent recommendations and price targets for Shake Shack and Noodles & Company, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Shake Shack	2	13	9	1	2.36
Noodles & Company	1	1	0	0	1.50

Shake Shack currently has a consensus target price of $116.57, indicating a potential upside of 24.60%. Noodles & Company has a consensus target price of $24.00, indicating a potential upside of 300.67%. Given Noodles & Company’s higher probable upside, analysts clearly believe Noodles & Company is more favorable than Shake Shack.

Valuation & Earnings

This table compares Shake Shack and Noodles & Company”s gross revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Shake Shack	$1.45 billion	2.76	$45.72 million	$1.09	85.83
Noodles & Company	$493.27 million	0.07	-$36.21 million	($7.92)	-0.76

Shake Shack has higher revenue and earnings than Noodles & Company. Noodles & Company is trading at a lower price-to-earnings ratio than Shake Shack, indicating that it is currently the more affordable of the two stocks.

Institutional & Insider Ownership

86.1% of Shake Shack shares are held by institutional investors. Comparatively, 65.7% of Noodles & Company shares are held by institutional investors. 8.5% of Shake Shack shares are held by insiders. Comparatively, 2.6% of Noodles & Company shares are held by insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a company will outperform the market over the long term.

Volatility & Risk

Shake Shack has a beta of 1.73, indicating that its share price is 73% more volatile than the S&P 500. Comparatively, Noodles & Company has a beta of 1.5, indicating that its share price is 50% more volatile than the S&P 500.

Summary

Shake Shack beats Noodles & Company on 14 of the 15 factors compared between the two stocks.

About Shake Shack

Shake Shack Inc. owns, operates, and licenses Shake Shack restaurants (Shacks) in the United States and internationally. Its Shacks offers hamburgers, chicken, hot dogs, crinkle cut fries, shakes, frozen custard, beer, wine, and other products. The company was founded in 2001 and is headquartered in New York, New York.

About Noodles & Company

Noodles & Co. engages in the business of development and operation of fast-casual restaurants that serve noodle and pasta dishes, soups, salads, and appetizers. The firm also offers pleasant dining, pick-up, and delivery experiences by quickly preparing fresh food with friendly service. The company was founded by Aaron Kennedy in 1995 and is headquartered in Broomfield, CO.