Contrasting Noodles & Co (NASDAQ:NDLS) & Good Times Restaurants (GTIM)

Noodles & Co (NASDAQ:NDLS) and Good Times Restaurants (NASDAQ:GTIM) are both small-cap retail/wholesale companies, but which is the superior investment? We will compare the two businesses based on the strength of their institutional ownership, risk, analyst recommendations, dividends, profitability, valuation and earnings.

Profitability

This table compares Noodles & Co and Good Times Restaurants’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Noodles & Co -1.84% 2.44% 0.56%
Good Times Restaurants -1.47% -4.08% -2.56%

Volatility and Risk

Noodles & Co has a beta of 0.04, indicating that its stock price is 96% less volatile than the S&P 500. Comparatively, Good Times Restaurants has a beta of 0.94, indicating that its stock price is 6% less volatile than the S&P 500.

Insider and Institutional Ownership

68.1% of Noodles & Co shares are held by institutional investors. Comparatively, 16.0% of Good Times Restaurants shares are held by institutional investors. 30.7% of Noodles & Co shares are held by insiders. Comparatively, 24.5% of Good Times Restaurants shares are held by insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock is poised for long-term growth.

Analyst Ratings

This is a breakdown of recent ratings and price targets for Noodles & Co and Good Times Restaurants, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Noodles & Co 0 3 4 0 2.57
Good Times Restaurants 0 0 2 0 3.00

Noodles & Co currently has a consensus target price of $10.79, suggesting a potential upside of 57.46%. Good Times Restaurants has a consensus target price of $6.25, suggesting a potential upside of 180.27%. Given Good Times Restaurants’ stronger consensus rating and higher probable upside, analysts plainly believe Good Times Restaurants is more favorable than Noodles & Co.

Valuation & Earnings

This table compares Noodles & Co and Good Times Restaurants’ revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Noodles & Co $457.84 million 0.66 -$8.44 million $0.02 342.50
Good Times Restaurants $99.24 million 0.28 -$1.03 million ($0.08) -27.88

Good Times Restaurants has lower revenue, but higher earnings than Noodles & Co. Good Times Restaurants is trading at a lower price-to-earnings ratio than Noodles & Co, indicating that it is currently the more affordable of the two stocks.

Summary

Noodles & Co beats Good Times Restaurants on 9 of the 14 factors compared between the two stocks.

Noodles & Co Company Profile

Noodles & Company develops and operates fast-casual restaurants in the United States. It offers cooked-to-order dishes, including noodles and pasta, soups, salads, and appetizers. As of January 1, 2019, the company operated 394 company-owned and 65 franchised restaurants in 29 states, and the District of Columbia. Noodles & Company was founded in 1995 and is based in Broomfield, Colorado.

Good Times Restaurants Company Profile

Good Times Restaurants Inc., through its subsidiaries, engages in the restaurant business in the United States. The company operates Good Times Burgers & Frozen Custard, a regional chain of quick service restaurants; and owns, operates, franchises, and licenses Bad Daddy's Burger Bar, a full service, upscale, ‘small box' restaurant concept. As of January 10, 2019, it operated and franchised a total of 35 restaurants under the Good Times Burgers & Frozen Custard name; and 35 Bad Daddy's Burger Bar restaurants. The company was founded in 1986 and is based in Lakewood, Colorado.

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