Contrasting Luckin Coffee (NASDAQ:LK) and Simplicity Esports and Gaming (NASDAQ:WINR)

Luckin Coffee (NASDAQ:LK) and Simplicity Esports and Gaming (OTCMKTS:WINR) are both small-cap consumer staples companies, but which is the better stock? We will contrast the two companies based on the strength of their dividends, analyst recommendations, institutional ownership, risk, profitability, earnings and valuation.

Institutional and Insider Ownership

37.1% of Luckin Coffee shares are held by institutional investors. 28.1% of Simplicity Esports and Gaming shares are held 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.

Profitability

This table compares Luckin Coffee and Simplicity Esports and Gaming’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Luckin Coffee N/A N/A N/A
Simplicity Esports and Gaming -237.94% -26.86% -19.21%

Analyst Ratings

This is a breakdown of recent recommendations for Luckin Coffee and Simplicity Esports and Gaming, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Luckin Coffee 0 1 2 0 2.67
Simplicity Esports and Gaming 0 0 0 0 N/A

Luckin Coffee currently has a consensus price target of $46.00, suggesting a potential upside of 3,233.33%. Given Luckin Coffee’s higher possible upside, equities research analysts plainly believe Luckin Coffee is more favorable than Simplicity Esports and Gaming.

Valuation and Earnings

This table compares Luckin Coffee and Simplicity Esports and Gaming’s top-line revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Luckin Coffee $125.27 million 2.59 -$241.26 million N/A N/A
Simplicity Esports and Gaming $40,000.00 198.49 -$3.57 million N/A N/A

Simplicity Esports and Gaming has lower revenue, but higher earnings than Luckin Coffee.

Summary

Luckin Coffee beats Simplicity Esports and Gaming on 7 of the 10 factors compared between the two stocks.

Luckin Coffee Company Profile

Luckin Coffee Inc. engages in the retail sale of freshly brewed drinks, and pre-made food and beverage items in the People's Republic of China. It offers freshly brewed drinks, including freshly brewed coffee and non-coffee drinks; and food and beverage items, such as light meals. The company operates pick-up stores, relax stores, and delivery kitchens under the Luckin brand, as well as Luckin mobile app, Weixin mini-program, and other third-party platforms that cover the customer purchase process. As of March 31, 2019, it operated 2,370 stores, including 2,163 pick-up stores, 109 relax stores, and 98 delivery kitchens in 28 cities in the People's Republic of China. The company was founded in 2017 and is based in Xiamen, the People's Republic of China.

Simplicity Esports and Gaming Company Profile

Simplicity Esports and Gaming Company operates as an esports company in the United States and Brazil. It owns and manages professional esports teams, such as Flamengo Esports, one of the top League of Legends team in Latin America. It holds online, play-at-home esports tournaments, allowing gamers to compete for cash and prizes from the comfort of their homes. It also collects and royalty from over 40 esports gaming centers, owned by franchisees. The centers blend the latest high performance gaming PCs and consoles for casual and competitive gaming, sales of gaming related merchandise and equipment, and organized grassroots leagues and tournaments.

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