Financial Review: Darden Restaurants (NYSE:DRI) vs. Reborn Coffee (NASDAQ:REBN)

Reborn Coffee (NASDAQ:REBN) and Darden Restaurants (NYSE:DRI) are both consumer staples companies, but which is the superior business? We will compare the two businesses based on the strength of their institutional ownership, risk, analyst recommendations, earnings, valuation, profitability and dividends.

Analyst Ratings

This is a breakdown of recent recommendations and price targets for Reborn Coffee and Darden Restaurants, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Reborn Coffee	0	0	0	0	0.00
Darden Restaurants	1	7	17	0	2.64

Darden Restaurants has a consensus target price of $192.52, indicating a potential downside of 1.37%. Given Darden Restaurants’ stronger consensus rating and higher possible upside, analysts clearly believe Darden Restaurants is more favorable than Reborn Coffee.

Risk and Volatility

Reborn Coffee has a beta of 2.4, meaning that its share price is 140% more volatile than the S&P 500. Comparatively, Darden Restaurants has a beta of 1.31, meaning that its share price is 31% more volatile than the S&P 500.

Profitability

This table compares Reborn Coffee and Darden Restaurants’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Reborn Coffee	-67.56%	-171.86%	-40.14%
Darden Restaurants	9.01%	50.12%	9.30%

Earnings and Valuation

This table compares Reborn Coffee and Darden Restaurants”s revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Reborn Coffee	$5.95 million	2.68	-$4.00 million	($1.45)	-3.00
Darden Restaurants	$11.39 billion	2.01	$1.03 billion	$8.73	22.36

Darden Restaurants has higher revenue and earnings than Reborn Coffee. Reborn Coffee is trading at a lower price-to-earnings ratio than Darden Restaurants, indicating that it is currently the more affordable of the two stocks.

Institutional & Insider Ownership

1.8% of Reborn Coffee shares are owned by institutional investors. Comparatively, 93.6% of Darden Restaurants shares are owned by institutional investors. 43.1% of Reborn Coffee shares are owned by insiders. Comparatively, 0.6% of Darden Restaurants shares are owned by insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock will outperform the market over the long term.

Summary

Darden Restaurants beats Reborn Coffee on 11 of the 14 factors compared between the two stocks.

About Reborn Coffee

Reborn Coffee, Inc., through its subsidiaries, operates and franchises retail locations, kiosks, and cafes that focus on serving specialty-roasted coffee in California. It purchases, roasts, and sells coffee, tea and other beverages, and various food items. It offers products in various form factors, such as whole bean roasted coffee bags, single-serve drip bags, and pour over packs. The company also offers its products online. Reborn Coffee, Inc. was founded in 2014 and is headquartered in Brea, California.

About Darden Restaurants

Darden Restaurants, Inc., together with its subsidiaries, owns and operates full-service restaurants in the United States and Canada. It operates under Olive Garden, LongHorn Steakhouse, Cheddar’s Scratch Kitchen, Yard House, The Capital Grille, Seasons 52, Bahama Breeze, Eddie V’s Prime Seafood, and Capital Burger brand names. Darden Restaurants, Inc. was incorporated in 1995 and is based in Orlando, Florida.