Financial Analysis: Kona Grill (KONA) vs. Noble Roman’s (NROM)

Kona Grill (NASDAQ:KONA) and Noble Roman’s (OTCMKTS:NROM) are both small-cap retail/wholesale companies, but which is the superior investment? We will compare the two companies based on the strength of their dividends, institutional ownership, valuation, analyst recommendations, risk, profitability and earnings.

Analyst Recommendations

This is a breakdown of recent recommendations and price targets for Kona Grill and Noble Roman’s, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Kona Grill 0 0 1 0 3.00
Noble Roman’s 0 0 0 0 N/A

Kona Grill presently has a consensus price target of $5.00, suggesting a potential upside of 161.78%. Given Kona Grill’s higher possible upside, equities research analysts clearly believe Kona Grill is more favorable than Noble Roman’s.

Valuation and Earnings

This table compares Kona Grill and Noble Roman’s’ top-line revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Kona Grill $179.08 million 0.14 -$23.43 million N/A N/A
Noble Roman’s $9.84 million 1.22 -$3.38 million N/A N/A

Noble Roman’s has lower revenue, but higher earnings than Kona Grill.

Institutional & Insider Ownership

13.0% of Kona Grill shares are held by institutional investors. Comparatively, 0.3% of Noble Roman’s shares are held by institutional investors. 29.2% of Kona Grill shares are held by insiders. Comparatively, 30.1% of Noble Roman’s shares are held by insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock will outperform the market over the long term.

Profitability

This table compares Kona Grill and Noble Roman’s’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Kona Grill -11.21% -114.10% -10.76%
Noble Roman’s -29.59% -27.48% -16.39%

Volatility and Risk

Kona Grill has a beta of 0.39, meaning that its share price is 61% less volatile than the S&P 500. Comparatively, Noble Roman’s has a beta of 0.83, meaning that its share price is 17% less volatile than the S&P 500.

Summary

Kona Grill beats Noble Roman’s on 6 of the 11 factors compared between the two stocks.

Kona Grill Company Profile

Kona Grill, Inc. owns and operates upscale casual restaurants under the Kona Grill brand name. As of December 31, 2017, it owned and operated 46 restaurants in 23 states of the United States and Puerto Rico; and 3 franchised restaurants in Mexico, the United Arab Emirates, and Canada. The company is based in Scottsdale, Arizona.

Noble Roman’s Company Profile

Noble Roman's, Inc. sells and services franchises and licenses, and operates foodservice locations for non-traditional foodservice operations and stand-alone restaurants. The company franchises, licenses, and operates under the Noble Roman's Craft Pizza & Pub, Noble Roman's Pizza, Noble Roman's Take-N-Bake, and Tuscano's Italian Style Subs trade names, which provide pizza, pasta, salads, sub sandwiches, and other related menu items. As of December 31, 2017, it operated 2,854 franchised or licensed outlets. The company has operations in 50 states of the United States. Noble Roman's, Inc. was incorporated in 1972 and is headquartered in Indianapolis, Indiana.

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