Financial Review: Luckin Coffee (OTCMKTS:LKNCY) vs. Jones Soda (OTCMKTS:JSDA)

Jones Soda (OTCMKTS:JSDA) and Luckin Coffee (OTCMKTS:LKNCY) are both consumer staples companies, but which is the superior investment? We will contrast the two businesses based on the strength of their valuation, analyst recommendations, institutional ownership, earnings, dividends, profitability and risk.

Institutional & Insider Ownership

0.5% of Luckin Coffee shares are held by institutional investors. 9.8% of Jones Soda shares are held by insiders. Comparatively, 2.7% of Luckin Coffee shares are held by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company is poised for long-term growth.

Analyst Ratings

This is a breakdown of current recommendations and price targets for Jones Soda and Luckin Coffee, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Jones Soda	0	0	0	0	0.00
Luckin Coffee	0	1	1	0	2.50

Luckin Coffee has a consensus target price of $52.00, suggesting a potential upside of 42.86%. Given Luckin Coffee’s stronger consensus rating and higher possible upside, analysts plainly believe Luckin Coffee is more favorable than Jones Soda.

Risk & Volatility

Jones Soda has a beta of 1.56, suggesting that its share price is 56% more volatile than the S&P 500. Comparatively, Luckin Coffee has a beta of -0.29, suggesting that its share price is 129% less volatile than the S&P 500.

Valuation and Earnings

This table compares Jones Soda and Luckin Coffee”s gross revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Jones Soda	$19.16 million	1.09	-$9.90 million	($0.04)	-4.50
Luckin Coffee	$4.72 billion	2.19	$401.71 million	$1.76	20.68

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

Profitability

This table compares Jones Soda and Luckin Coffee’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Jones Soda	-32.82%	-109.95%	-38.25%
Luckin Coffee	9.59%	36.80%	18.33%

Summary

Luckin Coffee beats Jones Soda on 12 of the 14 factors compared between the two stocks.

About Jones Soda

Jones Soda Co., together with its subsidiaries, engages in development, production, marketing, and distribution of beverages primarily in the United States, Canada, and internationally. The company provides craft sodas under the Jones Soda and Lemoncocco brands; and tetrahydrocannabinol infused cannabis products under the Mary Jones brand name. It also offers co-brand and private label products; fountain products, including cane sugar cola and sugar free cola, cane sugar sweetened ginger ale, orange and cream, root beer, and lemon lime; food products; and other products comprising teas, lemonade, vitamin enhanced waters, hydration beverages, and naturally flavored sparkling waters. The company sells and distributes its products through a network of independent distributors, and directly to national and regional retail accounts, as well as in grocery stores, convenience and gas stores, restaurants, delicatessens, sandwich shops, and burger restaurants; sells various products online, including soda with customized labels, wearables, candy, and other items; and licenses its trademarks for use on products sold by other manufacturers. Jones Soda Co. was founded in 1986 and is based in Seattle, Washington.

About Luckin Coffee

Luckin Coffee Inc. offers retail services of freshly brewed drinks, and pre-made food and beverage items in the People's Republic of China. It offers hot and iced freshly brewed coffee, such as Americano, Latte, Cappuccino, Macchiato, Flat White, and Mocha, as well as specialty coffee based on market and seasonal trends; coconut milk latte products; tea drinks; pre-made beverages; and pre-made food items, such as pastries, sandwiches, and snacks. In addition, the company offers Luckin Pop premium instant coffee and inspirational cups through mobile apps and e-commerce platforms. It operates pick-up stores, relax stores, and delivery kitchens under the Luckin brand, as well as Luckin mobile app, Weixin mini-program, and other third-party platforms for third-party payment channels. Further, the company offers technical and consultation services; and manufactures materials for products. Luckin Coffee Inc. was incorporated in 2017 and is headquartered in Xiamen, the People's Republic of China.