Critical Survey: Chuy’s (NASDAQ:CHUY) versus Noble Roman’s (NASDAQ:NROM)

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

Earnings & Valuation

This table compares Noble Roman’s and Chuy’s’ gross revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Noble Roman’s $12.45 million 0.89 -$3.06 million N/A N/A
Chuy’s $398.20 million 1.20 $5.54 million $0.88 32.69

Chuy’s has higher revenue and earnings than Noble Roman’s.

Analyst Recommendations

This is a summary of recent ratings and recommmendations for Noble Roman’s and Chuy’s, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Noble Roman’s 0 0 0 0 N/A
Chuy’s 1 1 1 0 2.00

Chuy’s has a consensus target price of $25.67, suggesting a potential downside of 10.77%. Given Chuy’s’ higher possible upside, analysts clearly believe Chuy’s is more favorable than Noble Roman’s.

Profitability

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

Net Margins Return on Equity Return on Assets
Noble Roman’s -15.86% -21.36% -9.82%
Chuy’s 2.62% 8.49% 4.09%

Institutional and Insider Ownership

0.3% of Noble Roman’s shares are held by institutional investors. 29.9% of Noble Roman’s shares are held by insiders. Comparatively, 1.7% of Chuy’s shares are held by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company will outperform the market over the long term.

Risk & Volatility

Noble Roman’s has a beta of 0.63, meaning that its stock price is 37% less volatile than the S&P 500. Comparatively, Chuy’s has a beta of 0.37, meaning that its stock price is 63% less volatile than the S&P 500.

Summary

Chuy’s beats Noble Roman’s on 8 of the 11 factors compared between the two stocks.

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.

Chuy’s Company Profile

Chuy's Holdings, Inc., through its subsidiaries, owns and operates full-service restaurants under the Chuy's name in Texas and 19 states in the Southeastern and Midwestern United States. As of December 30, 2018, it operated 100 restaurants. The company was founded in 1982 and is headquartered in Austin, Texas.

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