Head to Head Analysis: Airbnb (NASDAQ:ABNB) and Shake Shack (NYSE:SHAK)

Airbnb (NASDAQ:ABNB) and Shake Shack (NYSE:SHAK) are both consumer discretionary companies, but which is the superior investment? We will contrast the two businesses based on the strength of their earnings, risk, analyst recommendations, valuation, institutional ownership, dividends and profitability.

Risk and Volatility

Airbnb has a beta of 1.24, indicating that its stock price is 24% more volatile than the S&P 500. Comparatively, Shake Shack has a beta of 1.68, indicating that its stock price is 68% more volatile than the S&P 500.

Valuation and Earnings

This table compares Airbnb and Shake Shack”s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Airbnb	$12.24 billion	8.37	$2.51 billion	$4.40	38.89
Shake Shack	$1.45 billion	2.14	$45.72 million	$0.94	77.03

Airbnb has higher revenue and earnings than Shake Shack. Airbnb is trading at a lower price-to-earnings ratio than Shake Shack, indicating that it is currently the more affordable of the two stocks.

Insider & Institutional Ownership

80.8% of Airbnb shares are held by institutional investors. Comparatively, 86.1% of Shake Shack shares are held by institutional investors. 27.2% of Airbnb shares are held by insiders. Comparatively, 8.3% of Shake Shack shares are held by insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock will outperform the market over the long term.

Analyst Ratings

This is a breakdown of recent recommendations for Airbnb and Shake Shack, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Airbnb	2	13	27	2	2.66
Shake Shack	0	12	16	0	2.57

Airbnb presently has a consensus price target of $182.43, suggesting a potential upside of 6.61%. Shake Shack has a consensus price target of $87.00, suggesting a potential upside of 20.15%. Given Shake Shack’s higher possible upside, analysts plainly believe Shake Shack is more favorable than Airbnb.

Profitability

This table compares Airbnb and Shake Shack’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Airbnb	20.45%	33.38%	10.67%
Shake Shack	2.56%	9.29%	2.71%

Summary

Airbnb beats Shake Shack on 11 of the 15 factors compared between the two stocks.

About Airbnb

Airbnb, Inc., together with its subsidiaries, operates a platform that enables hosts to offer stays and experiences to guests worldwide. The company’s marketplace connects hosts and guests online or through mobile devices to book spaces and experiences. It primarily offers private rooms, primary homes, and vacation homes. The company was formerly known as AirBed & Breakfast, Inc. and changed its name to Airbnb, Inc. in November 2010. Airbnb, Inc. was founded in 2007 and is headquartered in San Francisco, California.

About Shake Shack

Shake Shack Inc. owns, operates, and licenses Shake Shack restaurants (Shacks) in the United States and internationally. Its Shacks offers hamburgers, chicken, hot dogs, crinkle cut fries, shakes, frozen custard, beer, wine, and other products. The company was founded in 2001 and is headquartered in New York, New York.