Critical Analysis: Red Robin Gourmet Burgers (NASDAQ:RRGB) vs. CAVA Group (NYSE:CAVA)

CAVA Group (NYSE:CAVA) and Red Robin Gourmet Burgers (NASDAQ:RRGB) are both retail/wholesale companies, but which is the superior stock? We will compare the two companies based on the strength of their dividends, risk, profitability, institutional ownership, earnings, analyst recommendations and valuation.

Profitability

This table compares CAVA Group and Red Robin Gourmet Burgers’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
CAVA Group	5.88%	9.10%	5.24%
Red Robin Gourmet Burgers	-4.05%	N/A	-6.79%

Earnings & Valuation

This table compares CAVA Group and Red Robin Gourmet Burgers”s gross revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
CAVA Group	$913.49 million	15.97	$13.28 million	$0.46	276.74
Red Robin Gourmet Burgers	$1.27 billion	0.07	-$21.23 million	($3.29)	-1.64

CAVA Group has higher earnings, but lower revenue than Red Robin Gourmet Burgers. Red Robin Gourmet Burgers is trading at a lower price-to-earnings ratio than CAVA Group, indicating that it is currently the more affordable of the two stocks.

Institutional & Insider Ownership

73.2% of CAVA Group shares are owned by institutional investors. Comparatively, 84.0% of Red Robin Gourmet Burgers shares are owned by institutional investors. 12.1% of CAVA Group shares are owned by company insiders. Comparatively, 3.2% of Red Robin Gourmet Burgers shares are owned by company 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.

Analyst Recommendations

This is a breakdown of current recommendations and price targets for CAVA Group and Red Robin Gourmet Burgers, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
CAVA Group	0	8	8	0	2.50
Red Robin Gourmet Burgers	0	0	3	0	3.00

CAVA Group presently has a consensus price target of $143.80, suggesting a potential upside of 12.96%. Red Robin Gourmet Burgers has a consensus price target of $14.50, suggesting a potential upside of 168.02%. Given Red Robin Gourmet Burgers’ stronger consensus rating and higher possible upside, analysts clearly believe Red Robin Gourmet Burgers is more favorable than CAVA Group.

Risk and Volatility

CAVA Group has a beta of 2.94, meaning that its stock price is 194% more volatile than the S&P 500. Comparatively, Red Robin Gourmet Burgers has a beta of 2.68, meaning that its stock price is 168% more volatile than the S&P 500.

Summary

CAVA Group beats Red Robin Gourmet Burgers on 10 of the 14 factors compared between the two stocks.

About CAVA Group

CAVA Group, Inc. owns and operates a chain of restaurants under the CAVA brand in the United States. The company also offers dips, spreads, and dressings through grocery stores. In addition, the company provides online and mobile ordering platforms. Cava Group, Inc. was founded in 2006 and is headquartered in Washington, the District of Columbia.

About Red Robin Gourmet Burgers

Red Robin Gourmet Burgers, Inc., together with its subsidiaries, develops, operates, and franchises casual-dining restaurants, in North America and one Canadian province. Its restaurants primarily offer burgers and pizza, appetizers, salads, soups, other entrees, desserts, wings, milkshakes, alcoholic and non-alcoholic specialty drinks, cocktails, wine, and beers. The company was founded in 1969 and is based in Englewood, Colorado.