Potbelly (NASDAQ:PBPB) vs. Chipotle Mexican Grill (NASDAQ:CMG) Head to Head Survey

Potbelly (NASDAQ:PBPB) and Chipotle Mexican Grill (NYSE:CMG) are both retail/wholesale companies, but which is the superior business? We will compare the two companies based on the strength of their profitability, valuation, risk, dividends, earnings, analyst recommendations and institutional ownership.

Insider and Institutional Ownership

72.0% of Potbelly shares are owned by institutional investors. Comparatively, 95.1% of Chipotle Mexican Grill shares are owned by institutional investors. 6.0% of Potbelly shares are owned by company insiders. Comparatively, 2.2% of Chipotle Mexican Grill shares are owned by company insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company is poised for long-term growth.

Analyst Recommendations

This is a breakdown of current recommendations for Potbelly and Chipotle Mexican Grill, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Potbelly 1 1 0 0 1.50
Chipotle Mexican Grill 6 12 14 0 2.25

Potbelly presently has a consensus target price of $8.50, indicating a potential upside of 77.45%. Chipotle Mexican Grill has a consensus target price of $663.83, indicating a potential downside of 10.66%. Given Potbelly’s higher possible upside, equities analysts clearly believe Potbelly is more favorable than Chipotle Mexican Grill.

Earnings and Valuation

This table compares Potbelly and Chipotle Mexican Grill’s top-line revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Potbelly $422.64 million 0.27 -$8.88 million $0.29 16.52
Chipotle Mexican Grill $4.86 billion 4.23 $176.55 million $9.06 82.01

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

Profitability

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

Net Margins Return on Equity Return on Assets
Potbelly -6.01% 3.85% 1.82%
Chipotle Mexican Grill 4.08% 19.78% 10.11%

Volatility and Risk

Potbelly has a beta of 1.38, indicating that its stock price is 38% more volatile than the S&P 500. Comparatively, Chipotle Mexican Grill has a beta of 0.67, indicating that its stock price is 33% less volatile than the S&P 500.

Summary

Chipotle Mexican Grill beats Potbelly on 11 of the 14 factors compared between the two stocks.

About Potbelly

Potbelly Corporation, through its subsidiaries, owns, operates, and franchises Potbelly Sandwich Works sandwich shops in the United States. The company offers toasty warm sandwiches, salads, soups, chili, sides, desserts, breakfast sandwiches, and steel cut oatmeal. As of February 25, 2019, the company operated approximately 400 shops in the United States; and approximately 50 franchisees operated shops in the United States, the Middle East, Canada, and India. The company was formerly known as Potbelly Sandwich Works, Inc. and changed its name to Potbelly Corporation in 2002. Potbelly Corporation was founded in 1977 and is headquartered in Chicago, Illinois.

About Chipotle Mexican Grill

Chipotle Mexican Grill, Inc., together with its subsidiaries, operates Chipotle Mexican Grill restaurants. As of December 31, 2018, it operated 2,491 restaurants, including 2,452 Chipotle restaurants in the United States, 37 Chipotle restaurants internationally, and two non-Chipotle restaurants. The company was founded in 1993 and is headquartered in Newport Beach, California.

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