Rave Restaurant Group (NASDAQ:RAVE) and Red Robin Gourmet Burgers (NASDAQ:RRGB) Head to Head Analysis

Red Robin Gourmet Burgers (NASDAQ:RRGB) and Rave Restaurant Group (NASDAQ:RAVE) 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.

Volatility & Risk

Red Robin Gourmet Burgers has a beta of 2.32, indicating that its stock price is 132% more volatile than the S&P 500. Comparatively, Rave Restaurant Group has a beta of 0.35, indicating that its stock price is 65% less volatile than the S&P 500.

Earnings & Valuation

This table compares Red Robin Gourmet Burgers and Rave Restaurant Group”s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Red Robin Gourmet Burgers	$1.21 billion	0.07	-$77.54 million	($1.31)	-3.69
Rave Restaurant Group	$12.04 million	3.48	$2.70 million	$0.20	14.75

Rave Restaurant Group has lower revenue, but higher earnings than Red Robin Gourmet Burgers. Red Robin Gourmet Burgers 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.

Analyst Recommendations

This is a summary of current recommendations and price targets for Red Robin Gourmet Burgers and Rave Restaurant Group, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Red Robin Gourmet Burgers	1	1	3	0	2.40
Rave Restaurant Group	0	1	0	0	2.00

Red Robin Gourmet Burgers currently has a consensus price target of $9.67, indicating a potential upside of 100.14%. Given Red Robin Gourmet Burgers’ stronger consensus rating and higher probable upside, analysts plainly believe Red Robin Gourmet Burgers is more favorable than Rave Restaurant Group.

Profitability

This table compares Red Robin Gourmet Burgers and Rave Restaurant Group’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Red Robin Gourmet Burgers	-1.92%	N/A	-1.94%
Rave Restaurant Group	23.04%	19.70%	17.07%

Insider and Institutional Ownership

84.0% of Red Robin Gourmet Burgers shares are owned by institutional investors. Comparatively, 15.1% of Rave Restaurant Group shares are owned by institutional investors. 2.6% of Red Robin Gourmet Burgers shares are owned by insiders. Comparatively, 28.0% of Rave Restaurant Group 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.

Summary

Rave Restaurant Group beats Red Robin Gourmet Burgers on 8 of the 14 factors compared between the two stocks.

About Red Robin Gourmet Burgers

Red Robin Gourmet Burgers, Inc., together with its subsidiaries, develops, operates, and franchises casual-dining restaurants, in North America and one Canadian province. Its restaurants primarily offer burgers and pizza, appetizers, salads, soups, other entrees, desserts, wings, milkshakes, alcoholic and non-alcoholic specialty drinks, cocktails, wine, and beers. The company was founded in 1969 and is based in Englewood, 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.