Dave & Buster’s Entertainment (NASDAQ:PLAY – Get Free Report) and Xponential Fitness (NYSE:XPOF – Get Free Report) are both small-cap consumer discretionary companies, but which is the superior investment? We will contrast the two businesses based on the strength of their institutional ownership, dividends, profitability, risk, valuation, earnings and analyst recommendations.
Profitability
This table compares Dave & Buster’s Entertainment and Xponential Fitness’ net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets | |
| Dave & Buster’s Entertainment | -4.26% | -51.87% | -1.29% |
| Xponential Fitness | -13.64% | -3.40% | -0.66% |
Analyst Recommendations
This is a summary of recent ratings for Dave & Buster’s Entertainment and Xponential Fitness, as reported by MarketBeat.com.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score | |
| Dave & Buster’s Entertainment | 2 | 5 | 2 | 0 | 2.00 |
| Xponential Fitness | 1 | 10 | 1 | 0 | 2.00 |
Dave & Buster’s Entertainment currently has a consensus price target of $17.33, indicating a potential upside of 149.04%. Xponential Fitness has a consensus price target of $6.50, indicating a potential upside of 55.69%. Given Dave & Buster’s Entertainment’s higher possible upside, analysts clearly believe Dave & Buster’s Entertainment is more favorable than Xponential Fitness.
Insider and Institutional Ownership
91.4% of Dave & Buster’s Entertainment shares are owned by institutional investors. Comparatively, 58.6% of Xponential Fitness shares are owned by institutional investors. 1.7% of Dave & Buster’s Entertainment shares are owned by company insiders. Comparatively, 24.1% of Xponential Fitness shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock will outperform the market over the long term.
Risk and Volatility
Dave & Buster’s Entertainment has a beta of 1.92, meaning that its stock price is 92% more volatile than the S&P 500. Comparatively, Xponential Fitness has a beta of 1.2, meaning that its stock price is 20% more volatile than the S&P 500.
Valuation & Earnings
This table compares Dave & Buster’s Entertainment and Xponential Fitness”s revenue, earnings per share (EPS) and valuation.
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio | |
| Dave & Buster’s Entertainment | $2.08 billion | 0.12 | -$48.70 million | ($2.57) | -2.71 |
| Xponential Fitness | $314.88 million | 0.65 | -$33.79 million | ($1.47) | -2.84 |
Xponential Fitness has lower revenue, but higher earnings than Dave & Buster’s Entertainment. Xponential Fitness is trading at a lower price-to-earnings ratio than Dave & Buster’s Entertainment, indicating that it is currently the more affordable of the two stocks.
Summary
Dave & Buster’s Entertainment beats Xponential Fitness on 7 of the 13 factors compared between the two stocks.
About Dave & Buster’s Entertainment
Dave & Buster's Entertainment, Inc. owns and operates entertainment and dining venues for adults and families. Its venues offer a menu of entrees and appetizers, as well as a selection of non-alcoholic and alcoholic beverages; and an assortment of entertainment attractions centered on playing games and watching live sports, and other televised events. The company operates its venues under the Dave & Buster's name. As of April 02, 2019, it owned and operated 125 venues in 39 states, Puerto Rico, and Canada. The company was founded in 1982 and is headquartered in Dallas, Texas.
About Xponential Fitness
Xponential Fitness, Inc., through its subsidiaries, operates as a boutique fitness franchisor in North America. It offers pilates, indoor cycling, barre, stretching, rowing, dancing, boxing, running, functional training, and yoga services under the Club Pilates, Pure Barre, CycleBar, StretchLab, Row House, YogaSix, Rumble, AKT, Stride, and BFT brands. Xponential Fitness, Inc. was founded in 2017 and is headquartered in Irvine, California.
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