Analyzing Dave & Buster’s Entertainment (NASDAQ:PLAY) & TH International (NASDAQ:THCH)

Dave & Buster’s Entertainment (NASDAQ:PLAY) and TH International (NASDAQ:THCH) are both small-cap retail/wholesale companies, but which is the better stock? We will contrast the two businesses based on the strength of their profitability, analyst recommendations, institutional ownership, earnings, risk, dividends and valuation.

Valuation & Earnings

This table compares Dave & Buster’s Entertainment and TH International’s revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Dave & Buster’s Entertainment	$2.21 billion	0.64	$126.90 million	$2.35	15.22
TH International	$221.94 million	0.49	-$123.81 million	($0.74)	-0.89

Dave & Buster’s Entertainment has higher revenue and earnings than TH International. TH International is trading at a lower price-to-earnings ratio than Dave & Buster’s Entertainment, indicating that it is currently the more affordable of the two stocks.

Institutional and Insider Ownership

91.5% of Dave & Buster’s Entertainment shares are held by institutional investors. Comparatively, 91.9% of TH International shares are held by institutional investors. 1.6% of Dave & Buster’s Entertainment shares are held by company insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a company will outperform the market over the long term.

Analyst Recommendations

This is a breakdown of recent ratings and target prices for Dave & Buster’s Entertainment and TH International, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Dave & Buster’s Entertainment	0	3	5	0	2.63
TH International	0	0	0	0	N/A

Dave & Buster’s Entertainment currently has a consensus target price of $65.71, indicating a potential upside of 83.76%. Given Dave & Buster’s Entertainment’s higher probable upside, analysts clearly believe Dave & Buster’s Entertainment is more favorable than TH International.

Volatility and Risk

Dave & Buster’s Entertainment has a beta of 2.13, suggesting that its share price is 113% more volatile than the S&P 500. Comparatively, TH International has a beta of 0.27, suggesting that its share price is 73% less volatile than the S&P 500.

Profitability

This table compares Dave & Buster’s Entertainment and TH International’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Dave & Buster’s Entertainment	4.48%	48.50%	3.47%
TH International	-53.46%	N/A	-20.48%

Summary

Dave & Buster’s Entertainment beats TH International on 12 of the 13 factors compared between the two stocks.

About Dave & Buster’s Entertainment

Dave & Buster's Entertainment, Inc. owns and operates entertainment and dining venues for adults and families. Its venues offer a menu of entrees and appetizers, as well as a selection of non-alcoholic and alcoholic beverages; and an assortment of entertainment attractions centered on playing games and watching live sports, and other televised events. The company operates its venues under the Dave & Buster's name. As of April 02, 2019, it owned and operated 125 venues in 39 states, Puerto Rico, and Canada. The company was founded in 1982 and is headquartered in Dallas, Texas.

About TH International

TH International Limited operates Tim Hortons coffee shops in mainland China, Hong Kong, and Macau. The company offers brewed tea, coffee, milk tea, lemonade, hot chocolate, and coffee drinks. It is also involved in franchise related business. The company is based in Shanghai, the People's Republic of China.