Noodles & Company (NASDAQ:NDLS – Get Free Report) and Rocky Mountain Chocolate Factory (NASDAQ:RMCF – Get Free Report) are both small-cap retail/wholesale companies, but which is the superior investment? We will contrast the two businesses based on the strength of their profitability, risk, dividends, valuation, analyst recommendations, earnings and institutional ownership.
Analyst Ratings
This is a summary of recent ratings and price targets for Noodles & Company and Rocky Mountain Chocolate Factory, as provided by MarketBeat.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score | |
| Noodles & Company | 1 | 1 | 0 | 0 | 1.50 |
| Rocky Mountain Chocolate Factory | 1 | 0 | 0 | 0 | 1.00 |
Valuation and Earnings
This table compares Noodles & Company and Rocky Mountain Chocolate Factory”s top-line revenue, earnings per share (EPS) and valuation.
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio | |
| Noodles & Company | $495.09 million | 0.15 | -$42.57 million | ($6.38) | -1.95 |
| Rocky Mountain Chocolate Factory | $29.58 million | 0.65 | -$6.12 million | ($0.52) | -3.98 |
Rocky Mountain Chocolate Factory has lower revenue, but higher earnings than Noodles & Company. Rocky Mountain Chocolate Factory is trading at a lower price-to-earnings ratio than Noodles & Company, indicating that it is currently the more affordable of the two stocks.
Profitability
This table compares Noodles & Company and Rocky Mountain Chocolate Factory’s net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets | |
| Noodles & Company | -7.46% | N/A | -5.63% |
| Rocky Mountain Chocolate Factory | -13.62% | -62.48% | -19.16% |
Risk & Volatility
Noodles & Company has a beta of 1.43, indicating that its share price is 43% more volatile than the S&P 500. Comparatively, Rocky Mountain Chocolate Factory has a beta of 0.7, indicating that its share price is 30% less volatile than the S&P 500.
Insider and Institutional Ownership
65.7% of Noodles & Company shares are owned by institutional investors. Comparatively, 50.3% of Rocky Mountain Chocolate Factory shares are owned by institutional investors. 2.8% of Noodles & Company shares are owned by insiders. Comparatively, 42.2% of Rocky Mountain Chocolate Factory shares are owned by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock is poised for long-term growth.
Summary
Noodles & Company beats Rocky Mountain Chocolate Factory on 8 of the 12 factors compared between the two stocks.
About Noodles & Company
Noodles & Co. engages in the business of development and operation of fast-casual restaurants that serve noodle and pasta dishes, soups, salads, and appetizers. The firm also offers pleasant dining, pick-up, and delivery experiences by quickly preparing fresh food with friendly service. The company was founded by Aaron Kennedy in 1995 and is headquartered in Broomfield, CO.
About Rocky Mountain Chocolate Factory
Rocky Mountain Chocolate Factory, Inc., together with its subsidiaries, operates as a confectionery franchisor, manufacturer, and retail operator. It operates through Franchising, Manufacturing, Retail Stores, and Other segments. The company produces approximately 400 chocolate candies and other confectionery products, including clusters, caramels, creams, toffees, mints, and truffles; and offers 15 varieties of caramel apples and other products that are prepared in individual stores, as well as provides ice cream, coffee, and other sundries. Rocky Mountain Chocolate Factory, Inc. was founded in 1981 and is headquartered in Durango, Colorado.
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