Head-To-Head Review: Darden Restaurants (NYSE:DRI) versus Xponential Fitness (NYSE:XPOF)

Darden Restaurants (NYSE:DRI) and Xponential Fitness (NYSE:XPOF) are both consumer discretionary companies, but which is the better business? We will compare the two businesses based on the strength of their valuation, risk, analyst recommendations, earnings, dividends, institutional ownership and profitability.

Institutional & Insider Ownership

93.6% of Darden Restaurants shares are owned by institutional investors. Comparatively, 58.6% of Xponential Fitness shares are owned by institutional investors. 0.7% of Darden Restaurants shares are owned by insiders. Comparatively, 24.1% of Xponential Fitness shares are owned by insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock is poised for long-term growth.

Analyst Ratings

This is a summary of recent ratings for Darden Restaurants and Xponential Fitness, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Darden Restaurants	0	9	18	0	2.67
Xponential Fitness	1	10	1	0	2.00

Darden Restaurants presently has a consensus target price of $232.86, indicating a potential upside of 9.50%. Xponential Fitness has a consensus target price of $6.50, indicating a potential upside of 74.03%. Given Xponential Fitness’ higher probable upside, analysts clearly believe Xponential Fitness is more favorable than Darden Restaurants.

Profitability

This table compares Darden Restaurants and Xponential Fitness’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Darden Restaurants	9.13%	57.44%	9.62%
Xponential Fitness	-13.64%	-3.40%	-0.66%

Valuation and Earnings

This table compares Darden Restaurants and Xponential Fitness”s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Darden Restaurants	$13.21 billion	1.84	$1.21 billion	$10.38	20.49
Xponential Fitness	$314.88 million	0.59	-$33.79 million	($1.47)	-2.54

Darden Restaurants has higher revenue and earnings than Xponential Fitness. Xponential Fitness is trading at a lower price-to-earnings ratio than Darden Restaurants, indicating that it is currently the more affordable of the two stocks.

Volatility and Risk

Darden Restaurants has a beta of 0.6, meaning that its stock price is 40% less volatile than the S&P 500. Comparatively, Xponential Fitness has a beta of 1.07, meaning that its stock price is 7% more volatile than the S&P 500.

Summary

Darden Restaurants beats Xponential Fitness on 11 of the 14 factors compared between the two stocks.

About Darden Restaurants

Darden Restaurants, Inc., together with its subsidiaries, owns and operates full-service restaurants in the United States and Canada. It operates under Olive Garden, LongHorn Steakhouse, Cheddar’s Scratch Kitchen, Yard House, The Capital Grille, Seasons 52, Bahama Breeze, Eddie V’s Prime Seafood, and Capital Burger brand names. Darden Restaurants, Inc. was incorporated in 1995 and is based in Orlando, Florida.

About Xponential Fitness

Xponential Fitness, Inc., through its subsidiaries, operates as a boutique fitness franchisor in North America. It offers pilates, indoor cycling, barre, stretching, rowing, dancing, boxing, running, functional training, and yoga services under the Club Pilates, Pure Barre, CycleBar, StretchLab, Row House, YogaSix, Rumble, AKT, Stride, and BFT brands. Xponential Fitness, Inc. was founded in 2017 and is headquartered in Irvine, California.