Reviewing Kona Grill (OTCMKTS:KONAQ) & Portillo’s (NASDAQ:PTLO)

Kona Grill (OTCMKTS:KONAQ) and Portillo’s (NASDAQ:PTLO) are both small-cap retail/wholesale companies, but which is the better investment? We will contrast the two businesses based on the strength of their valuation, earnings, dividends, profitability, risk, institutional ownership and analyst recommendations.

Profitability

This table compares Kona Grill and Portillo’s’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Kona Grill	N/A	N/A	N/A
Portillo’s	2.27%	3.98%	1.31%

Valuation & Earnings

This table compares Kona Grill and Portillo’s’ revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Kona Grill	$156.94 million	0.01	-$31.97 million	N/A	N/A
Portillo’s	$642.93 million	1.31	$10.85 million	$0.26	58.27

Portillo’s has higher revenue and earnings than Kona Grill.

Analyst Ratings

This is a breakdown of current ratings and price targets for Kona Grill and Portillo’s, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Kona Grill	0	0	0	0	N/A
Portillo’s	0	1	5	0	2.83

Portillo’s has a consensus target price of $23.00, indicating a potential upside of 51.82%. Given Portillo’s’ higher probable upside, analysts clearly believe Portillo’s is more favorable than Kona Grill.

Institutional and Insider Ownership

81.7% of Portillo’s shares are owned by institutional investors. 31.5% of Kona Grill shares are owned by insiders. Comparatively, 7.2% of Portillo’s shares are owned by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company is poised for long-term growth.

Risk and Volatility

Kona Grill has a beta of 0.62, suggesting that its stock price is 38% less volatile than the S&P 500. Comparatively, Portillo’s has a beta of 2.05, suggesting that its stock price is 105% more volatile than the S&P 500.

Summary

Portillo’s beats Kona Grill on 10 of the 11 factors compared between the two stocks.

About Kona Grill

Kona Grill, Inc. owns and operates upscale casual restaurants under the Kona Grill brand name. As of April 30, 2019, it operated 27 full-service restaurants in the United States. On April 30, 2019, Kona Grill, Inc., along with its affiliates, filed a voluntary petition for reorganization under Chapter 11 in the U.S. Bankruptcy Court for the District of Delaware. The company is based in Scottsdale, Arizona.

About Portillo’s

Portillo's Inc. owns and operates fast casual and quick service restaurants in the United States. The company offers Chicago-style hot dogs and sausages, Italian beef sandwiches, burgers, chopped salads, crinkle-cut French fries, homemade chocolate cakes, and milkshakes. The company also offers its products through its website. Portillo's Inc. was founded in 1963 and is based in Oak Brook, Illinois.