Financial Contrast: Xponential Fitness (NYSE:XPOF) & Dave & Buster’s Entertainment (NASDAQ:PLAY)

Xponential Fitness (NYSE:XPOF) and Dave & Buster’s Entertainment (NASDAQ:PLAY) are both small-cap consumer discretionary companies, but which is the superior business? We will compare the two businesses based on the strength of their institutional ownership, earnings, dividends, analyst recommendations, valuation, risk and profitability.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
Xponential Fitness	-13.64%	-3.40%	-0.66%
Dave & Buster’s Entertainment	-4.26%	-51.87%	-1.29%

Analyst Recommendations

This is a breakdown of current recommendations for Xponential Fitness and Dave & Buster’s Entertainment, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Xponential Fitness	1	10	1	0	2.00
Dave & Buster’s Entertainment	2	5	2	0	2.00

Xponential Fitness presently has a consensus price target of $6.50, suggesting a potential upside of 45.09%. Dave & Buster’s Entertainment has a consensus price target of $17.33, suggesting a potential upside of 121.37%. Given Dave & Buster’s Entertainment’s higher probable upside, analysts plainly believe Dave & Buster’s Entertainment is more favorable than Xponential Fitness.

Volatility and Risk

Xponential Fitness has a beta of 1.2, indicating that its stock price is 20% more volatile than the S&P 500. Comparatively, Dave & Buster’s Entertainment has a beta of 1.92, indicating that its stock price is 92% more volatile than the S&P 500.

Valuation and Earnings

This table compares Xponential Fitness and Dave & Buster’s Entertainment”s revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Xponential Fitness	$288.47 million	0.77	-$33.79 million	($1.47)	-3.05
Dave & Buster’s Entertainment	$2.10 billion	0.13	-$48.70 million	($2.57)	-3.05

Xponential Fitness has higher earnings, but lower revenue than Dave & Buster’s Entertainment. Xponential Fitness 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 & Insider Ownership

58.5% of Xponential Fitness shares are held by institutional investors. Comparatively, 91.4% of Dave & Buster’s Entertainment shares are held by institutional investors. 24.1% of Xponential Fitness shares are held by company insiders. Comparatively, 1.7% 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 stock is poised for long-term growth.

About Xponential Fitness

Xponential Fitness, Inc., through its subsidiaries, operates as a boutique fitness franchisor in North America. It offers pilates, indoor cycling, barre, stretching, rowing, dancing, boxing, running, functional training, and yoga services under the Club Pilates, Pure Barre, CycleBar, StretchLab, Row House, YogaSix, Rumble, AKT, Stride, and BFT brands. Xponential Fitness, Inc. was founded in 2017 and is headquartered in Irvine, California.

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.