Head to Head Review: Chipotle Mexican Grill (CMG) versus Noodles & (NASDAQ:NDLS)

Noodles & (NASDAQ: NDLS) and Chipotle Mexican Grill (NYSE:CMG) are both retail/wholesale companies, but which is the better investment? We will compare the two businesses based on the strength of their valuation, profitabiliy, risk, institutional ownership, analyst recommendations, earnings and dividends.

Earnings and Valuation

This table compares Noodles & and Chipotle Mexican Grill’s gross revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Noodles & $490.20 million 0.31 $11.41 million ($3.48) -1.11
Chipotle Mexican Grill $4.14 billion 2.43 $330.51 million $4.74 73.95

Chipotle Mexican Grill has higher revenue and earnings than Noodles &. Noodles & is trading at a lower price-to-earnings ratio than Chipotle Mexican Grill, indicating that it is currently the more affordable of the two stocks.

Risk and Volatility

Noodles & has a beta of -0.57, suggesting that its share price is 157% less volatile than the S&P 500. Comparatively, Chipotle Mexican Grill has a beta of 0.64, suggesting that its share price is 36% less volatile than the S&P 500.

Profitability

This table compares Noodles & and Chipotle Mexican Grill’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Noodles & -19.61% -10.55% -2.49%
Chipotle Mexican Grill 3.17% 10.65% 7.38%

Institutional & Insider Ownership

54.9% of Noodles & shares are held by institutional investors. Comparatively, 95.7% of Chipotle Mexican Grill shares are held by institutional investors. 52.7% of Noodles & shares are held by company insiders. Comparatively, 2.0% of Chipotle Mexican Grill shares are held by company insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock is poised for long-term growth.

Analyst Recommendations

This is a summary of current ratings and price targets for Noodles & and Chipotle Mexican Grill, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Noodles & 2 6 1 0 1.89
Chipotle Mexican Grill 6 20 10 0 2.11

Noodles & presently has a consensus price target of $5.69, indicating a potential upside of 47.73%. Chipotle Mexican Grill has a consensus price target of $402.10, indicating a potential upside of 14.72%. Given Noodles &’s higher probable upside, research analysts plainly believe Noodles & is more favorable than Chipotle Mexican Grill.

Summary

Chipotle Mexican Grill beats Noodles & on 11 of the 13 factors compared between the two stocks.

About Noodles &

Noodles & Company develops and operates fast casual restaurants. The Company’s menu includes a range of cooked-to-order dishes, including noodles and pasta, soups, salads, sandwiches and appetizers. The Company has approximately 490 restaurants, including 420 Company-owned and 70 franchised locations, across 40 states, the District of Columbia and one Canadian province. The Company offers over 30 globally inspired Asian, Mediterranean and American dishes together on a single menu. The Company offers approximately 10 fresh vegetables and six proteins, including marinated steak, naturally raised pork, chicken, meatballs, shrimp and organic tofu. The Company offers Kids Meals, which includes sides, such as broccoli, carrots, fruit, applesauce and a portion of its housemade rice crispy treat. The Company’s restaurants’ locations include Arizona, California, Colorado, Delaware, New York, North Dakota, Ohio, Texas, Utah, Virginia, Washington and Wisconsin.

About Chipotle Mexican Grill

Chipotle Mexican Grill, Inc. (Chipotle), together with its subsidiaries, operates Chipotle Mexican Grill restaurants. The Company’s Chipotle Mexican Grill restaurants serve a menu of burritos, tacos, burrito bowls (a burrito without the tortilla) and salads. As of December 31, 2016, the Company managed its operations and restaurants based on 11 regions. As of December 31, 2016, the Company operated 2,198 Chipotle restaurants throughout the United States, as well as 29 international Chipotle restaurants, and it also had 23 restaurants in operation in other non-Chipotle concepts. As of December 31, 2016, 29 of its restaurants were located outside of the United States, with 17 in Canada, six in the United Kingdom, five in France and one in Frankfurt, Germany. The Company sells gift cards, which do not have an expiration date. The Company categorizes its restaurants as end-caps (at the end of a line of retail outlets), in-lines (in a line of retail outlets), free-standing or other.

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