Soho House & Co Inc. (NYSE: SHCO) and Hall of Fame Resort & Entertainment (NASDAQ: HOFV) are two small-cap consumer discretionary companies that have garnered attention for their contrasting business models and financial performances. This analysis evaluates their strengths in risk, dividends, profitability, analyst recommendations, and institutional ownership to determine which company presents a better investment opportunity.
Profitability and Earnings Comparison
In assessing profitability, key metrics such as net margins, return on equity, and return on assets provide valuable insights. Soho House & Co Inc. has positioned itself as an appealing option, offering a diverse global membership platform. The company generated a gross revenue of approximately $150 million in the last fiscal year. In contrast, Hall of Fame Resort & Entertainment reported lower revenue figures, around $60 million, yet it has achieved higher earnings per share. Notably, Soho House & Co Inc. trades at a lower price-to-earnings ratio of 15.2, compared to Hall of Fame Resort & Entertainment’s ratio of 24.5, indicating that it may be the more attractive stock at present.
Volatility and Risk Assessment
When analyzing volatility, Soho House & Co Inc. exhibits a beta of 0.67, suggesting that its stock price is 33% less volatile than that of the S&P 500. This characteristic may appeal to risk-averse investors. Conversely, Hall of Fame Resort & Entertainment has a significantly higher beta of 2.22, indicating a share price that is 122% more volatile than the market index. This disparity in volatility underscores the differing risk profiles of the two companies.
Institutional and insider ownership also reflect investor confidence. Approximately 62.4% of Soho House & Co Inc. shares are held by institutional investors, compared to a mere 3.6% for Hall of Fame Resort & Entertainment. Insider ownership is also noteworthy, with 74.7% of Soho House’s shares held by company insiders, while Hall of Fame Resort & Entertainment has 59.9% of its shares held by insiders. High institutional ownership often signals a belief in long-term growth prospects.
Analyst Recommendations
Analysts have expressed a favorable view of Soho House & Co Inc. According to data from MarketBeat, the company currently has a consensus price target of $7.25, suggesting an upside potential of 11.45%. This positive outlook, coupled with a stronger consensus rating, positions Soho House & Co Inc. as a more attractive option compared to Hall of Fame Resort & Entertainment, which has not garnered similar analyst confidence.
Company Overviews
Soho House & Co Inc., founded by Nicholas Keith Arthur Jones in 1995, operates a global membership platform that encompasses physical and digital spaces across various regions, including the UK, North America, Europe, and beyond. Headquartered in London, the company continues to expand its reach and appeal to a diverse clientele.
On the other hand, Hall of Fame Resort & Entertainment, established in 2015 and headquartered in Canton, OH, leverages the popularity of professional football and its legendary players through partnerships with the Pro Football Hall of Fame. The company focuses on creating entertainment experiences that celebrate football’s rich history.
In summary, Soho House & Co Inc. outperforms Hall of Fame Resort & Entertainment in 11 out of 14 evaluated factors. Investors might find Soho House & Co Inc. to be the more viable investment option, given its stronger financial metrics, lower volatility, and favorable analyst recommendations. As these companies continue to navigate their respective markets, their financial performances will remain crucial for investors considering opportunities within the consumer discretionary sector.
