FAT Brands (NASDAQ:FAT) & Rave Restaurant Group (NASDAQ:RAVE) Financial Comparison

FAT Brands (NASDAQ:FAT) and Rave Restaurant Group (NASDAQ:RAVE) are both small-cap retail/wholesale companies, but which is the better investment? We will contrast the two companies based on the strength of their analyst recommendations, institutional ownership, earnings, profitability, valuation, dividends and risk.

Risk and Volatility

FAT Brands has a beta of 1.34, suggesting that its share price is 34% more volatile than the S&P 500. Comparatively, Rave Restaurant Group has a beta of 0.39, suggesting that its share price is 61% less volatile than the S&P 500.

Profitability

This table compares FAT Brands and Rave Restaurant Group’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
FAT Brands	-39.33%	N/A	-17.99%
Rave Restaurant Group	23.19%	19.22%	16.81%

Insider and Institutional Ownership

6.9% of FAT Brands shares are held by institutional investors. Comparatively, 15.1% of Rave Restaurant Group shares are held by institutional investors. 15.7% of FAT Brands shares are held by insiders. Comparatively, 28.0% of Rave Restaurant Group shares are held by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company is poised for long-term growth.

Analyst Recommendations

This is a summary of current ratings and target prices for FAT Brands and Rave Restaurant Group, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
FAT Brands	1	2	0	0	1.67
Rave Restaurant Group	0	1	0	0	2.00

Earnings & Valuation

This table compares FAT Brands and Rave Restaurant Group”s gross revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
FAT Brands	$574.14 million	0.01	-$189.85 million	($13.35)	-0.01
Rave Restaurant Group	$12.04 million	3.59	$2.70 million	$0.21	14.48

Rave Restaurant Group has lower revenue, but higher earnings than FAT Brands. FAT Brands is trading at a lower price-to-earnings ratio than Rave Restaurant Group, indicating that it is currently the more affordable of the two stocks.

Summary

Rave Restaurant Group beats FAT Brands on 10 of the 12 factors compared between the two stocks.

About FAT Brands

FAT Brands Inc., a multi-brand restaurant franchising company, acquires, develops, markets, and manages quick service, fast casual, casual dining, and polished casual dining restaurant concepts worldwide. It owns restaurant brands, including Round Table Pizza, Marble Slab Creamery, Great American Cookies, Hot Dog on a Stick, Pretzelmaker, Fazoli's, Fatburger, Johnny Rockets, Elevation Burger, Yalla Mediterranean, Buffalo's Cafe and Buffalo's Express, Hurricane Grill & Wings, Ponderosa Steakhouse/Bonanza Steakhouse, Native Grill & Wings, Smokey Bones, and Twin Peaks. The company was incorporated in 2017 and is headquartered in Beverly Hills, California. FAT Brands Inc. is a subsidiary of Fog Cutter Holdings, LLC.

About Rave Restaurant Group

Rave Restaurant Group, Inc., together with its subsidiaries, engages in the operation and franchising of pizza buffet, delivery/carry-out (delco), and express restaurants under the Pizza Inn and Pie Five trademarks in the United States and internationally. The company operates through three segments: Pizza Inn Franchising, Pie Five Franchising, and Company-Owned Restaurants. Its buffet restaurants are located in free standing buildings or strip centers in retail developments that offer dine-in, carryout, and catering services, as well as delivery services. The company’s delco restaurants provide delivery and carryout services and are located in shopping centers or other in-line retail developments. Its Express restaurants serve customers through various non-traditional points of sale and are located in convenience stores, food courts, college campuses, airport terminals, travel plazas, athletic facilities, or other commercial facilities. The company’s Pizza Inn Express restaurants serve customers through a non-traditional, licensed, pizza-only model called Pizza Inn Express, located at production-oriented facilities. In addition, it operates and franchises fast casual restaurants under the Pie Five Pizza Company or Pie Five trademarks. The company was formerly known as Pizza Inn Holdings, Inc. and changed its name to Rave Restaurant Group, Inc. in January 2015. Rave Restaurant Group, Inc. was founded in 1958 and is based in The Colony, Texas.