Critical Survey: Shake Shack (NYSE:SHAK) & Pinstripes (NYSE:PNST)

Pinstripes (NYSE:PNST) and Shake Shack (NYSE:SHAK) are both consumer discretionary companies, but which is the superior investment? We will contrast the two businesses based on the strength of their institutional ownership, dividends, profitability, risk, valuation, earnings and analyst recommendations.

Profitability

This table compares Pinstripes and Shake Shack’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Pinstripes	N/A	N/A	-6.06%
Shake Shack	2.23%	5.63%	1.63%

Valuation & Earnings

This table compares Pinstripes and Shake Shack”s top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Pinstripes	$123.58 million	0.34	-$6.79 million	N/A	N/A
Shake Shack	$1.09 billion	4.19	$20.26 million	$0.55	195.29

Shake Shack has higher revenue and earnings than Pinstripes.

Risk and Volatility

Pinstripes has a beta of -0.1, meaning that its stock price is 110% less volatile than the S&P 500. Comparatively, Shake Shack has a beta of 1.83, meaning that its stock price is 83% more volatile than the S&P 500.

Analyst Recommendations

This is a summary of recent ratings for Pinstripes and Shake Shack, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Pinstripes	0	0	3	0	3.00
Shake Shack	1	10	6	1	2.39

Pinstripes currently has a consensus price target of $4.50, indicating a potential upside of 334.78%. Shake Shack has a consensus price target of $107.56, indicating a potential upside of 0.14%. Given Pinstripes’ stronger consensus rating and higher possible upside, analysts clearly believe Pinstripes is more favorable than Shake Shack.

Insider and Institutional Ownership

56.8% of Pinstripes shares are owned by institutional investors. Comparatively, 86.1% of Shake Shack shares are owned by institutional investors. 22.8% of Pinstripes shares are owned by company insiders. Comparatively, 9.7% of Shake Shack shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock will outperform the market over the long term.

Summary

Shake Shack beats Pinstripes on 10 of the 13 factors compared between the two stocks.

About Pinstripes

Pinstripes Holdings Inc. operates a dining and entertainment concept restaurants. The company provides Italian-American food and beverage menu with bowling, bocce, and event space. It also offers private event options and catering services. The company is based in Northbrook, Illinois.

About Shake Shack

Shake Shack Inc. owns, operates, and licenses Shake Shack restaurants (Shacks) in the United States and internationally. Its Shacks offers hamburgers, chicken, hot dogs, crinkle cut fries, shakes, frozen custard, beer, wine, and other products. The company was founded in 2001 and is headquartered in New York, New York.