Financial Analysis: Dave & Buster’s Entertainment (NASDAQ:PLAY) versus Reborn Coffee (NASDAQ:REBN)

Dave & Buster’s Entertainment (NASDAQ:PLAY) and Reborn Coffee (NASDAQ:REBN) are both small-cap retail/wholesale companies, but which is the better business? We will contrast the two companies based on the strength of their earnings, institutional ownership, dividends, analyst recommendations, profitability, valuation and risk.

Analyst Ratings

This is a summary of recent recommendations and price targets for Dave & Buster’s Entertainment and Reborn Coffee, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Dave & Buster’s Entertainment	0	4	5	0	2.56
Reborn Coffee	0	0	0	0	0.00

Dave & Buster’s Entertainment presently has a consensus price target of $61.57, suggesting a potential upside of 61.35%. Given Dave & Buster’s Entertainment’s stronger consensus rating and higher possible upside, equities research analysts clearly believe Dave & Buster’s Entertainment is more favorable than Reborn Coffee.

Institutional & Insider Ownership

91.5% of Dave & Buster’s Entertainment shares are owned by institutional investors. Comparatively, 1.8% of Reborn Coffee shares are owned by institutional investors. 1.6% of Dave & Buster’s Entertainment shares are owned by insiders. Comparatively, 43.1% of Reborn Coffee 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.

Risk and Volatility

Dave & Buster’s Entertainment has a beta of 2.13, suggesting that its stock price is 113% more volatile than the S&P 500. Comparatively, Reborn Coffee has a beta of 2.69, suggesting that its stock price is 169% more volatile than the S&P 500.

Valuation and Earnings

This table compares Dave & Buster’s Entertainment and Reborn Coffee”s top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Dave & Buster’s Entertainment	$2.21 billion	0.68	$126.90 million	$2.74	13.93
Reborn Coffee	$5.95 million	0.72	-$4.00 million	($1.45)	-0.81

Dave & Buster’s Entertainment has higher revenue and earnings than Reborn Coffee. Reborn Coffee 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.

Profitability

This table compares Dave & Buster’s Entertainment and Reborn Coffee’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Dave & Buster’s Entertainment	5.10%	51.75%	3.57%
Reborn Coffee	-67.56%	-171.86%	-40.14%

Summary

Dave & Buster’s Entertainment beats Reborn Coffee on 11 of the 14 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 Reborn Coffee

Reborn Coffee, Inc., through its subsidiaries, operates and franchises retail locations, kiosks, and cafes that focus on serving specialty-roasted coffee in California. It purchases, roasts, and sells coffee, tea and other beverages, and various food items. It offers products in various form factors, such as whole bean roasted coffee bags, single-serve drip bags, and pour over packs. The company also offers its products online. Reborn Coffee, Inc. was founded in 2014 and is headquartered in Brea, California.