Potbelly Corporation (PBPB) vs. Kona Grill (KONA) Head to Head Survey

Potbelly Corporation (NASDAQ: PBPB) and Kona Grill (NASDAQ:KONA) are both small-cap retail/wholesale companies, but which is the superior investment? We will compare the two companies based on the strength of their dividends, risk, profitability, earnings, analyst recommendations, institutional ownership and valuation.

Valuation & Earnings

This table compares Potbelly Corporation and Kona Grill’s gross revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio NetIncome Earnings Per Share Price/Earnings Ratio
Potbelly Corporation $407.13 million 0.67 $8.21 million $0.09 122.79
Kona Grill $169.52 million 0.17 -$21.62 million ($2.58) -1.12

Potbelly Corporation has higher revenue and earnings than Kona Grill. Kona Grill is trading at a lower price-to-earnings ratio than Potbelly Corporation, indicating that it is currently the more affordable of the two stocks.

Insider & Institutional Ownership

67.7% of Potbelly Corporation shares are held by institutional investors. Comparatively, 49.0% of Kona Grill shares are held by institutional investors. 9.6% of Potbelly Corporation shares are held by company insiders. Comparatively, 29.2% of Kona Grill shares are held by company insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock is poised for long-term growth.

Analyst Ratings

This is a summary of current ratings and price targets for Potbelly Corporation and Kona Grill, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Potbelly Corporation 0 3 1 0 2.25
Kona Grill 0 2 3 0 2.60

Potbelly Corporation presently has a consensus target price of $13.67, suggesting a potential upside of 23.68%. Kona Grill has a consensus target price of $6.67, suggesting a potential upside of 129.89%. Given Kona Grill’s stronger consensus rating and higher possible upside, analysts clearly believe Kona Grill is more favorable than Potbelly Corporation.

Risk and Volatility

Potbelly Corporation has a beta of 0.9, suggesting that its share price is 10% less volatile than the S&P 500. Comparatively, Kona Grill has a beta of 0.32, suggesting that its share price is 68% less volatile than the S&P 500.

Profitability

This table compares Potbelly Corporation and Kona Grill’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Potbelly Corporation 0.54% 7.76% 5.49%
Kona Grill -14.98% -39.42% -11.31%

Summary

Potbelly Corporation beats Kona Grill on 9 of the 13 factors compared between the two stocks.

Potbelly Corporation Company Profile

Potbelly Corporation owns and operates Potbelly Sandwich Works sandwich shops in the United States. The Company has domestic and international franchise operations of Potbelly Sandwich Works sandwich shops. As of December 25, 2016, the Company operated Potbelly Sandwich Works sandwich shops in 29 states and the District of Columbia. As of December 25, 2016, the Company had a domestic base of 441 shops in 29 states and the District of Columbia. Of these, the company operated 411 shops, and franchisees operated 30 shops, as of December 25, 2016. As of December 25, 2016, the Company had 13 international franchised shops, which included 11 shops in the Middle East, a shop in the United Kingdom and a shop in Canada. As of December 25, 2016, the Company had domestic franchise shops in Arkansas, Iowa, Illinois, Kentucky, Michigan, Minnesota, Missouri, Nebraska, North Carolina, North Dakota, Ohio, Pennsylvania, South Dakota, Tennessee, Texas and Virginia.

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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