Kura Sushi USA (NASDAQ:KRUS) and Del Taco Restaurants (NASDAQ:TACO) 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, dividends, earnings, valuation, risk, analyst recommendations and institutional ownership.

Valuation & Earnings

This table compares Kura Sushi USA and Del Taco Restaurants’ top-line revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Kura Sushi USA $64.25 million 1.42 $1.46 million $0.27 40.59
Del Taco Restaurants $512.95 million 0.27 -$118.29 million $0.47 7.85

Kura Sushi USA has higher earnings, but lower revenue than Del Taco Restaurants. Del Taco Restaurants is trading at a lower price-to-earnings ratio than Kura Sushi USA, indicating that it is currently the more affordable of the two stocks.

Insider & Institutional Ownership

37.7% of Kura Sushi USA shares are owned by institutional investors. Comparatively, 82.7% of Del Taco Restaurants shares are owned by institutional investors. 1.1% of Kura Sushi USA shares are owned by insiders. Comparatively, 16.4% of Del Taco Restaurants shares are owned by insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a company is poised for long-term growth.

Profitability

This table compares Kura Sushi USA and Del Taco Restaurants’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Kura Sushi USA N/A N/A N/A
Del Taco Restaurants -23.06% 4.36% 1.83%

Analyst Recommendations

This is a breakdown of current ratings and target prices for Kura Sushi USA and Del Taco Restaurants, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Kura Sushi USA 1 0 4 0 2.60
Del Taco Restaurants 0 0 2 0 3.00

Kura Sushi USA presently has a consensus price target of $31.50, indicating a potential upside of 187.41%. Del Taco Restaurants has a consensus price target of $10.00, indicating a potential upside of 171.00%. Given Kura Sushi USA’s higher possible upside, equities research analysts clearly believe Kura Sushi USA is more favorable than Del Taco Restaurants.

Summary

Del Taco Restaurants beats Kura Sushi USA on 7 of the 13 factors compared between the two stocks.

Kura Sushi USA Company Profile

Kura Sushi USA, Inc. operates revolving sushi bar restaurants in the United States. The company's restaurants offer Japanese cuisine and a revolving sushi service model. As of April 1, 2019, it operated 21 restaurants in California, Texas, Georgia, and Illinois. The company was formerly known as Kula Sushi USA, Inc. and changed its name to Kura Sushi USA, Inc. in October 2017. The company was founded in 2008 and is based in Irvine, California. Kura Sushi USA, Inc. is a subsidiary of Kura Sushi, Inc.

Del Taco Restaurants Company Profile

Del Taco Restaurants, Inc. develops, franchises, owns, and operates Del Taco quick-service Mexican-American restaurants in the United States. The company's restaurants offer Mexican inspired and American classic dishes. As of December 10, 2018, it operated approximately 560 restaurants across 14 states. The company was founded in 1964 and is headquartered in Lake Forest, California.

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