Contrasting Potbelly (NASDAQ:PBPB) & Sweetgreen (NYSE:SG)

Potbelly (NASDAQ:PBPB) and Sweetgreen (NYSE:SG) are both retail/wholesale companies, but which is the superior business? We will compare the two businesses based on the strength of their analyst recommendations, risk, earnings, institutional ownership, valuation, dividends and profitability.

Volatility & Risk

Potbelly has a beta of 1.18, indicating that its share price is 18% more volatile than the S&P 500. Comparatively, Sweetgreen has a beta of 2.32, indicating that its share price is 132% more volatile than the S&P 500.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
Potbelly	7.58%	21.42%	1.85%
Sweetgreen	-14.33%	-19.34%	-10.82%

Valuation and Earnings

This table compares Potbelly and Sweetgreen”s top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Potbelly	$477.37 million	0.52	$5.12 million	$0.12	68.75
Sweetgreen	$648.95 million	6.30	-$113.38 million	($0.93)	-38.82

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

Analyst Ratings

This is a summary of current ratings for Potbelly and Sweetgreen, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Potbelly	0	1	3	0	2.75
Sweetgreen	0	3	8	0	2.73

Potbelly currently has a consensus price target of $14.33, indicating a potential upside of 73.95%. Sweetgreen has a consensus price target of $38.20, indicating a potential upside of 6.58%. Given Potbelly’s stronger consensus rating and higher probable upside, equities research analysts clearly believe Potbelly is more favorable than Sweetgreen.

Institutional and Insider Ownership

72.6% of Potbelly shares are owned by institutional investors. Comparatively, 95.8% of Sweetgreen shares are owned by institutional investors. 9.1% of Potbelly shares are owned by insiders. Comparatively, 21.5% of Sweetgreen shares are owned by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock will outperform the market over the long term.

Summary

Potbelly beats Sweetgreen on 8 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 Sweetgreen

Sweetgreen, Inc., together with its subsidiaries, operates fast food restaurants serving healthy foods at scale in the United States. The company also accepts orders through its online and mobile ordering platforms, as well as sells gift cards that do not have an expiration date and can be redeemed. The company was founded in 2006 and is headquartered in Los Angeles, California.