Head to Head Comparison: Rave Restaurant Group (NASDAQ:RAVE) vs. CAVA Group (NYSE:CAVA)

Rave Restaurant Group (NASDAQ:RAVE) and CAVA Group (NYSE:CAVA) are both retail/wholesale companies, but which is the better stock? We will contrast the two companies based on the strength of their institutional ownership, analyst recommendations, earnings, dividends, profitability, valuation and risk.

Volatility and Risk

Rave Restaurant Group has a beta of 0.35, suggesting that its stock price is 65% less volatile than the S&P 500. Comparatively, CAVA Group has a beta of 2.41, suggesting that its stock price is 141% more volatile than the S&P 500.

Profitability

This table compares Rave Restaurant Group and CAVA Group’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Rave Restaurant Group	23.04%	19.70%	17.07%
CAVA Group	5.40%	8.51%	4.98%

Institutional and Insider Ownership

15.1% of Rave Restaurant Group shares are held by institutional investors. Comparatively, 73.2% of CAVA Group shares are held by institutional investors. 28.0% of Rave Restaurant Group shares are held by insiders. Comparatively, 6.8% of CAVA Group shares are held by insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock will outperform the market over the long term.

Analyst Ratings

This is a breakdown of recent recommendations and price targets for Rave Restaurant Group and CAVA Group, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Rave Restaurant Group	0	1	0	0	2.00
CAVA Group	0	9	13	2	2.71

CAVA Group has a consensus target price of $83.22, indicating a potential downside of 2.54%. Given CAVA Group’s stronger consensus rating and higher possible upside, analysts clearly believe CAVA Group is more favorable than Rave Restaurant Group.

Valuation & Earnings

This table compares Rave Restaurant Group and CAVA Group”s top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Rave Restaurant Group	$12.04 million	3.53	$2.70 million	$0.20	14.95
CAVA Group	$1.18 billion	8.40	$130.32 million	$1.16	73.61

CAVA Group has higher revenue and earnings than Rave Restaurant Group. Rave Restaurant Group is trading at a lower price-to-earnings ratio than CAVA Group, indicating that it is currently the more affordable of the two stocks.

Summary

CAVA Group beats Rave Restaurant Group on 11 of the 15 factors compared between the two stocks.

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.

About CAVA Group

CAVA Group, Inc. owns and operates a chain of restaurants under the CAVA brand in the United States. The company also offers dips, spreads, and dressings through grocery stores. In addition, the company provides online and mobile ordering platforms. Cava Group, Inc. was founded in 2006 and is headquartered in Washington, the District of Columbia.