Potbelly (NASDAQ:PBPB) versus Reborn Coffee (NASDAQ:REBN) Critical Review

Potbelly (NASDAQ:PBPB) and Reborn Coffee (NASDAQ:REBN) are both small-cap retail/wholesale companies, but which is the superior stock? We will compare the two companies based on the strength of their dividends, analyst recommendations, earnings, profitability, valuation, risk and institutional ownership.

Analyst Ratings

This is a breakdown of current ratings and target prices for Potbelly and Reborn Coffee, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Potbelly	0	1	2	0	2.67
Reborn Coffee	0	0	0	0	0.00

Potbelly presently has a consensus price target of $16.00, suggesting a potential upside of 69.85%. Given Potbelly’s stronger consensus rating and higher possible upside, equities analysts plainly believe Potbelly is more favorable than Reborn Coffee.

Volatility & Risk

Potbelly has a beta of 1.28, meaning that its share price is 28% more volatile than the S&P 500. Comparatively, Reborn Coffee has a beta of 2.69, meaning that its share price is 169% more volatile than the S&P 500.

Institutional and Insider Ownership

72.6% of Potbelly shares are owned by institutional investors. Comparatively, 1.8% of Reborn Coffee shares are owned by institutional investors. 9.1% of Potbelly shares are owned by insiders. Comparatively, 43.1% of Reborn Coffee shares are owned by insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a company will outperform the market over the long term.

Earnings and Valuation

This table compares Potbelly and Reborn Coffee”s gross revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Potbelly	$471.72 million	0.60	$5.12 million	$1.25	7.54
Reborn Coffee	$5.95 million	1.03	-$4.00 million	($1.45)	-1.14

Potbelly has higher revenue and earnings than Reborn Coffee. Reborn Coffee is trading at a lower price-to-earnings ratio than Potbelly, indicating that it is currently the more affordable of the two stocks.

Profitability

This table compares Potbelly and Reborn Coffee’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Potbelly	8.14%	18.69%	2.41%
Reborn Coffee	-67.56%	-171.86%	-40.14%

Summary

Potbelly beats Reborn Coffee on 11 of the 14 factors compared between the two stocks.

About Potbelly

Potbelly Corporation, through its subsidiaries, owns, operates, and franchises Potbelly sandwich shops in the United States. The company was formerly known as Potbelly Sandwich Works, Inc. and changed its name to Potbelly Corporation in 2002. Potbelly Corporation was founded in 1977 and is headquartered in Chicago, Illinois.

About Reborn Coffee

Reborn Coffee, Inc., through its subsidiaries, operates and franchises retail locations, kiosks, and cafes that focus on serving specialty-roasted coffee in California. It purchases, roasts, and sells coffee, tea and other beverages, and various food items. It offers products in various form factors, such as whole bean roasted coffee bags, single-serve drip bags, and pour over packs. The company also offers its products online. Reborn Coffee, Inc. was founded in 2014 and is headquartered in Brea, California.