Dave & Buster’s Entertainment (NASDAQ:PLAY – Get Free Report) and Inspirato (NASDAQ:ISPO – Get Free Report) are both small-cap consumer discretionary companies, but which is the better stock? We will compare the two companies based on the strength of their dividends, institutional ownership, analyst recommendations, profitability, valuation, earnings and risk.
Volatility and Risk
Dave & Buster’s Entertainment has a beta of 1.94, meaning that its stock price is 94% more volatile than the S&P 500. Comparatively, Inspirato has a beta of -0.03, meaning that its stock price is 103% less volatile than the S&P 500.
Insider & Institutional Ownership
91.4% of Dave & Buster’s Entertainment shares are held by institutional investors. Comparatively, 39.5% of Inspirato shares are held by institutional investors. 1.7% of Dave & Buster’s Entertainment shares are held by insiders. Comparatively, 50.0% of Inspirato shares are held 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.
Profitability
This table compares Dave & Buster’s Entertainment and Inspirato’s net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets | |
| Dave & Buster’s Entertainment | -4.26% | -51.87% | -1.29% |
| Inspirato | -4.24% | N/A | -4.10% |
Analyst Ratings
This is a breakdown of current ratings for Dave & Buster’s Entertainment and Inspirato, as provided by MarketBeat.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score | |
| Dave & Buster’s Entertainment | 2 | 5 | 2 | 0 | 2.00 |
| Inspirato | 1 | 0 | 0 | 0 | 1.00 |
Dave & Buster’s Entertainment currently has a consensus price target of $17.33, suggesting a potential upside of 110.87%. Given Dave & Buster’s Entertainment’s stronger consensus rating and higher probable upside, equities research analysts clearly believe Dave & Buster’s Entertainment is more favorable than Inspirato.
Earnings and Valuation
This table compares Dave & Buster’s Entertainment and Inspirato”s top-line revenue, earnings per share and valuation.
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio | |
| Dave & Buster’s Entertainment | $2.10 billion | 0.14 | -$48.70 million | ($2.57) | -3.20 |
| Inspirato | $247.65 million | 0.22 | -$5.39 million | ($0.87) | -4.90 |
Inspirato has lower revenue, but higher earnings than Dave & Buster’s Entertainment. Inspirato 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.
Summary
Dave & Buster’s Entertainment beats Inspirato on 7 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 Inspirato
Inspirato Incorporated, together with its subsidiaries, operates as a subscription-based luxury travel company. The company's portfolio includes luxury vacation homes, and accommodations at luxury hotels and resorts, as well as luxury safaris, cruises, custom-designed itineraries, and other experiences. It is involved in solving critical pain points for hospitality suppliers seeking to monetize their property with rental income. In addition, the company offers Inspirato Pass for member to book pass trips; Inspirato Club for members to book trips up to one year in advance Inspirato for Good, a platform designed to help nonprofit organizations accelerate funding results; Inspirato for Business, a business-to-business channel through which subscription and travel products are sold directly to businesses seeking to leverage luxury accommodations to recruit, retain, and reward their employees. The company was founded in 2010 and is headquartered in Denver, Colorado.
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