Chuy’s Holdings (NASDAQ: CHUY) and Good Times Restaurants (NASDAQ:GTIM) are both small-cap retail/wholesale companies, but which is the better investment? We will compare the two businesses based on the strength of their analyst recommendations, valuation, earnings, profitabiliy, institutional ownership, risk and dividends.

Volatility & Risk

Chuy’s Holdings has a beta of 0.01, indicating that its share price is 99% less volatile than the S&P 500. Comparatively, Good Times Restaurants has a beta of 0.52, indicating that its share price is 48% less volatile than the S&P 500.

Institutional & Insider Ownership

98.4% of Chuy’s Holdings shares are owned by institutional investors. Comparatively, 33.1% of Good Times Restaurants shares are owned by institutional investors. 3.3% of Chuy’s Holdings shares are owned by insiders. Comparatively, 8.4% of Good Times Restaurants shares are owned by insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company is poised for long-term growth.

Analyst Recommendations

This is a summary of recent recommendations and price targets for Chuy’s Holdings and Good Times Restaurants, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Chuy’s Holdings 0 7 2 0 2.22
Good Times Restaurants 0 0 1 0 3.00

Chuy’s Holdings presently has a consensus target price of $29.63, suggesting a potential upside of 23.95%. Good Times Restaurants has a consensus target price of $6.00, suggesting a potential upside of 69.01%. Given Good Times Restaurants’ stronger consensus rating and higher possible upside, analysts plainly believe Good Times Restaurants is more favorable than Chuy’s Holdings.

Profitability

This table compares Chuy’s Holdings and Good Times Restaurants’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Chuy’s Holdings 5.09% 11.81% 7.73%
Good Times Restaurants -1.24% -2.32% -1.81%

Earnings and Valuation

This table compares Chuy’s Holdings and Good Times Restaurants’ revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Chuy’s Holdings $339.46 million 1.19 $41.53 million $1.02 23.43
Good Times Restaurants $70.08 million 0.62 $2.74 million ($0.08) -44.38

Chuy’s Holdings has higher revenue and earnings than Good Times Restaurants. Good Times Restaurants is trading at a lower price-to-earnings ratio than Chuy’s Holdings, indicating that it is currently the more affordable of the two stocks.

Summary

Chuy’s Holdings beats Good Times Restaurants on 9 of the 13 factors compared between the two stocks.

About Chuy’s Holdings

Chuy’s Holdings, Inc. operates Chuy’s, a restaurant concept offering a distinct menu of authentic, freshly prepared Mexican and Tex-Mex inspired food. As of December 25, 2016, the Company operated 80 Chuy’s restaurants across 16 states. The Company offers the same menu during lunch and dinner, which includes enchiladas, fajitas, tacos, burritos, combination platters and daily specials, complemented by a range of appetizers, soups and salads. Each of the Company’s restaurants offers a range of homemade sauces, including the signature Hatch green chile and creamy jalapeno sauces. The Company also offers a full-service bar in all of its restaurants providing its customers a range of beverage offerings, featuring a selection of specialty cocktails including its signature on-the-rocks margaritas made with fresh, hand-squeezed lime juice, and the Texas Martini, a made-to-order, hand-shaken cocktail served with jalapeno-stuffed olives.

About Good Times Restaurants

Good Times Restaurants Inc. operates and franchises Good Times Burgers & Frozen Custard (Good Times) restaurants and Bad Daddy’s Burger Bar concept (Bad Daddy’s). The Company operates through two segments: Good Times Burgers and Frozen Custard restaurants, and Bad Daddy’s Burger Bar restaurants. Good Times is a quick service restaurant concept. The menu of a Good Times restaurant includes hamburgers, cheeseburgers, chicken sandwiches, French fries, onion rings, soft drinks and frozen custard products. Its breakfast menu includes breakfast burritos, orange juice and coffee. Bad Daddy’s operates in the burger casual dining sector and is chef driven, full service, full bar concept. Its menu consists of burgers, salads, sandwiches and appetizers. Its bar focuses on local, craft microbrew beers and specialty cocktails. The Company operates through its subsidiaries, Good Times Drive Thru, Inc., BD of Colorado, LLC, Bad Daddy’s Franchise Development, LLC and Bad Daddy’s International, LLC.

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