Red Robin Gourmet Burgers (NASDAQ:RRGB) & Papa John’s International (NASDAQ:PZZA) Head to Head Review

Red Robin Gourmet Burgers (NASDAQ:RRGB) and Papa John’s International (NASDAQ:PZZA) are both retail/wholesale companies, but which is the superior investment? We will contrast the two companies based on the strength of their profitability, institutional ownership, risk, dividends, analyst recommendations, earnings and valuation.

Valuation & Earnings

This table compares Red Robin Gourmet Burgers and Papa John’s International’s gross revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Red Robin Gourmet Burgers $868.72 million 0.39 -$276.07 million ($11.33) -1.93
Papa John’s International $1.81 billion 2.59 $57.93 million $1.40 91.82

Papa John’s International has higher revenue and earnings than Red Robin Gourmet Burgers. Red Robin Gourmet Burgers is trading at a lower price-to-earnings ratio than Papa John’s International, indicating that it is currently the more affordable of the two stocks.

Analyst Recommendations

This is a breakdown of current ratings and target prices for Red Robin Gourmet Burgers and Papa John’s International, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Red Robin Gourmet Burgers 1 1 3 0 2.40
Papa John’s International 0 1 10 0 2.91

Red Robin Gourmet Burgers currently has a consensus target price of $33.40, indicating a potential upside of 53.07%. Papa John’s International has a consensus target price of $123.17, indicating a potential downside of 4.19%. Given Red Robin Gourmet Burgers’ higher possible upside, equities analysts plainly believe Red Robin Gourmet Burgers is more favorable than Papa John’s International.

Profitability

This table compares Red Robin Gourmet Burgers and Papa John’s International’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Red Robin Gourmet Burgers -5.89% -31.28% -3.97%
Papa John’s International 4.82% -43.92% 11.76%

Insider and Institutional Ownership

96.0% of Red Robin Gourmet Burgers shares are held by institutional investors. Comparatively, 98.5% of Papa John’s International shares are held by institutional investors. 2.5% of Red Robin Gourmet Burgers shares are held by insiders. Comparatively, 16.5% of Papa John’s International shares are held by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company will outperform the market over the long term.

Risk and Volatility

Red Robin Gourmet Burgers has a beta of 2.93, meaning that its share price is 193% more volatile than the S&P 500. Comparatively, Papa John’s International has a beta of 1.03, meaning that its share price is 3% more volatile than the S&P 500.

Summary

Papa John’s International beats Red Robin Gourmet Burgers on 10 of the 14 factors compared between the two stocks.

Red Robin Gourmet Burgers Company Profile

Red Robin Gourmet Burgers, Inc. develops, operates, and franchises full-service restaurants North America. It serves a variety of salads, soups, appetizers, other entrees, desserts, signature alcoholic and non-alcoholic beverages. The company was founded in September 1969 and is headquartered in Greenwood Village, CO.

Papa John’s International Company Profile

Papa John’s International, Inc. operates and franchises pizza delivery and carryout restaurants. It operates through the following segments: Domestic Company-Owned Restaurants, North America Commissaries, North America Franchising, and International Operations. The Domestic Company-Owned Restaurants segment consists of the operations of all domestic company-owned restaurants and derives its revenues principally from retail sales of pizza and side items, including breadsticks, cheese sticks, chicken poppers and wings, dessert items, and canned or bottled beverages. The North America Commissaries segment consists of the operations of regional dough production and product distribution centers and derives its revenues principally from the sale and distribution of food and paper products to domestic company-owned and franchised restaurants in the United States and Canada. The North America Franchising segment consists of franchise sales and support activities and derives its revenues from sales of franchise and development rights and collection of royalties from franchisees located in the United States and Canada. The International Operations segment principally consists of distribution

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