Contrasting Potbelly (NASDAQ:PBPB) and Sweetgreen (NYSE:SG)

Potbelly (NASDAQ:PBPB) and Sweetgreen (NYSE:SG) are both retail/wholesale companies, but which is the superior stock? We will compare the two businesses based on the strength of their institutional ownership, valuation, earnings, analyst recommendations, profitability, risk and dividends.

Institutional & Insider Ownership

72.6% of Potbelly shares are owned by institutional investors. Comparatively, 95.8% of Sweetgreen shares are owned by institutional investors. 9.1% of Potbelly shares are owned by company insiders. Comparatively, 21.5% of Sweetgreen shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock is poised for long-term growth.

Risk and Volatility

Potbelly has a beta of 1.18, meaning that its stock price is 18% more volatile than the S&P 500. Comparatively, Sweetgreen has a beta of 2.32, meaning that its stock price is 132% more volatile than the S&P 500.

Analyst Recommendations

This is a summary of current recommendations and price targets for Potbelly and Sweetgreen, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Potbelly	0	1	3	0	2.75
Sweetgreen	0	3	8	0	2.73

Potbelly presently has a consensus price target of $14.33, suggesting a potential upside of 70.63%. Sweetgreen has a consensus price target of $38.20, suggesting a potential upside of 6.26%. Given Potbelly’s stronger consensus rating and higher possible upside, analysts clearly believe Potbelly is more favorable than Sweetgreen.

Profitability

This table compares Potbelly and Sweetgreen’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Potbelly	7.58%	21.42%	1.85%
Sweetgreen	-14.33%	-19.34%	-10.82%

Valuation & Earnings

This table compares Potbelly and Sweetgreen”s revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Potbelly	$491.41 million	0.51	$5.12 million	$0.12	70.00
Sweetgreen	$584.04 million	7.03	-$113.38 million	($0.93)	-38.66

Potbelly has higher earnings, but lower revenue than Sweetgreen. Sweetgreen is trading at a lower price-to-earnings ratio than Potbelly, indicating that it is currently the more affordable of the two stocks.

Summary

Potbelly beats Sweetgreen on 8 of the 14 factors compared between the two stocks.

About Potbelly

Potbelly Corporation, through its subsidiaries, owns, operates, and franchises Potbelly sandwich shops in the United States. The company was formerly known as Potbelly Sandwich Works, Inc. and changed its name to Potbelly Corporation in 2002. Potbelly Corporation was founded in 1977 and is headquartered in Chicago, Illinois.

About Sweetgreen

Sweetgreen, Inc., together with its subsidiaries, operates fast food restaurants serving healthy foods at scale in the United States. The company also accepts orders through its online and mobile ordering platforms, as well as sells gift cards that do not have an expiration date and can be redeemed. The company was founded in 2006 and is headquartered in Los Angeles, California.