Financial Analysis: ARKO (NASDAQ:ARKO) versus Reborn Coffee (NASDAQ:REBN)

Reborn Coffee (NASDAQ:REBN) and ARKO (NASDAQ:ARKO) are both small-cap consumer staples companies, but which is the superior stock? We will contrast the two companies based on the strength of their analyst recommendations, institutional ownership, dividends, risk, earnings, profitability and valuation.

Analyst Ratings

This is a summary of recent ratings and price targets for Reborn Coffee and ARKO, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Reborn Coffee	1	0	0	0	1.00
ARKO	1	3	1	1	2.33

ARKO has a consensus target price of $7.13, suggesting a potential upside of 51.60%. Given ARKO’s stronger consensus rating and higher possible upside, analysts clearly believe ARKO is more favorable than Reborn Coffee.

Insider & Institutional Ownership

1.8% of Reborn Coffee shares are held by institutional investors. Comparatively, 78.3% of ARKO shares are held by institutional investors. 24.0% of Reborn Coffee shares are held by company insiders. Comparatively, 22.5% of ARKO shares are held by company insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company will outperform the market over the long term.

Risk & Volatility

Reborn Coffee has a beta of 2.13, indicating that its stock price is 113% more volatile than the S&P 500. Comparatively, ARKO has a beta of 0.86, indicating that its stock price is 14% less volatile than the S&P 500.

Valuation & Earnings

This table compares Reborn Coffee and ARKO”s gross revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Reborn Coffee	$5.93 million	1.60	-$4.81 million	($2.56)	-0.62
ARKO	$8.73 billion	0.06	$20.84 million	$0.11	42.73

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

Profitability

This table compares Reborn Coffee and ARKO’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Reborn Coffee	-191.48%	-995.56%	-170.77%
ARKO	0.24%	6.95%	0.52%

Summary

ARKO beats Reborn Coffee on 12 of the 15 factors compared between the two stocks.

About Reborn Coffee

Reborn Coffee, Inc., through its subsidiaries, operates and franchises retail locations, kiosks, and cafes that focus on serving specialty-roasted coffee in California. It purchases, roasts, and sells coffee, tea and other beverages, and various food items. It offers products in various form factors, such as whole bean roasted coffee bags, single-serve drip bags, and pour over packs. The company also offers its products online. Reborn Coffee, Inc. was founded in 2014 and is headquartered in Brea, California.

About ARKO

Arko Corp. operates convenience stores in the United States. It operates through Retail, Wholesale, Fleet Fueling, and GPMP segments. The Retail segment engages in the sale of fuel and merchandise to retail consumers. Its Wholesale segment supplies fuel to third-party dealers and consignment agents. The Fleet Fueling segment supplies fuel to proprietary and third-party cardlock, and issuance of proprietary fuel cards. Its GPMP segment supplies fuel to retail and wholesale segments. The company is based in Richmond, Virginia.