Critical Review: Chefs’ Warehouse (CHEF) & Its Rivals

Chefs’ Warehouse (NASDAQ:CHEF) is one of 149 public companies in the “Consumer Staples Distribution & Retail” industry, but how does it weigh in compared to its peers? We will compare Chefs’ Warehouse to related companies based on the strength of its profitability, analyst recommendations, valuation, risk, earnings, dividends and institutional ownership.

Institutional & Insider Ownership

91.5% of Chefs’ Warehouse shares are owned by institutional investors. Comparatively, 45.0% of shares of all “Consumer Staples Distribution & Retail” companies are owned by institutional investors. 11.1% of Chefs’ Warehouse shares are owned by company insiders. Comparatively, 19.7% of shares of all “Consumer Staples Distribution & Retail” companies are owned by company insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock will outperform the market over the long term.

Volatility and Risk

Chefs’ Warehouse has a beta of 1.47, meaning that its stock price is 47% more volatile than the S&P 500. Comparatively, Chefs’ Warehouse’s peers have a beta of 0.44, meaning that their average stock price is 56% less volatile than the S&P 500.

Profitability

This table compares Chefs’ Warehouse and its peers’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Chefs’ Warehouse	2.27%	17.48%	5.48%
Chefs’ Warehouse Competitors	-25.86%	3.87%	2.96%

Analyst Recommendations

This is a breakdown of current ratings and target prices for Chefs’ Warehouse and its peers, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Chefs’ Warehouse	0	2	5	0	2.71
Chefs’ Warehouse Competitors	2243	8276	10067	459	2.42

Chefs’ Warehouse presently has a consensus price target of $120.17, suggesting a potential upside of 12.02%. As a group, “Consumer Staples Distribution & Retail” companies have a potential upside of 56.92%. Given Chefs’ Warehouse’s peers higher probable upside, analysts plainly believe Chefs’ Warehouse has less favorable growth aspects than its peers.

Earnings and Valuation

This table compares Chefs’ Warehouse and its peers gross revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Net Income	Price/Earnings Ratio
Chefs’ Warehouse	$4.15 billion	$72.36 million	46.04
Chefs’ Warehouse Competitors	$34.73 billion	$846.26 million	17.26

Chefs’ Warehouse’s peers have higher revenue and earnings than Chefs’ Warehouse. Chefs’ Warehouse is trading at a higher price-to-earnings ratio than its peers, indicating that it is currently more expensive than other companies in its industry.

Summary

Chefs’ Warehouse beats its peers on 8 of the 13 factors compared.

Chefs’ Warehouse Company Profile

The Chefs’ Warehouse, Inc., together with its subsidiaries, distributes specialty food and center-of-the-plate products in the United States, the Middle East, and Canada. The company’s product portfolio includes specialty food products, such as artisan charcuterie, specialty cheeses, unique oils and vinegars, truffles, caviar, chocolate, and pastry products; and center-of-the-plate products consisting of custom cut beef, seafood, and hormone-free poultry, as well as broadline food products comprising cooking oils, butter, eggs, milk, and flour. The company serves menu-driven independent restaurants, fine dining establishments, country clubs, hotels, caterers, culinary schools, bakeries, patisseries, chocolatiers, cruise lines, casinos, and specialty food stores. It markets its center-of-the-plate products directly to consumers through a mail and e-commerce platform. The Chefs’ Warehouse, Inc. was founded in 1985 and is headquartered in Ridgefield, Connecticut.