3 Restaurant Stocks to Feast On: CAVA, BJRI, WING Lead the Charge in a Post-Inflation Recovery

As inflation eases and dining demand rebounds, the restaurant sector is primed for a comeback. Three standout stocks—CAVA Group, Inc. (CAVA), BJ's Restaurants, Inc. (BJRI), and Wingstop Inc. (WING)—are positioned to capitalize on this shift, backed by robust earnings growth, strategic innovation, and a coveted Zacks Rank #2 (Buy) across the board. Let's dissect why these are must-watch plays for investors seeking to profit from a post-inflation dining renaissance.

Why Restaurants Are Set to Rebound: Cooling Inflation + Rising Demand = Tailwinds Ahead

The restaurant industry faces headwinds like labor costs and supply chain volatility, but two macro trends are now tilting in its favor:
1. Easing Inflation: Consumer price pressures are moderating, allowing restaurants to stabilize pricing without deterring diners.
2. Fed Rate Cuts: Lower borrowing costs could boost consumer spending, reigniting demand for dining out.

Additionally, off-premise sales (e.g., delivery, takeout) and digital innovation are driving resilience. Restaurants leveraging these trends are outperforming peers—and that's exactly what CAVA, BJRI, and WING are doing.

CAVA Group, Inc. (CAVA): Mediterranean Momentum with a 31% Earnings Surge

CAVA's Zacks Rank #2 (Buy) isn't an accident. The fast-casual Mediterranean chain is projected to deliver 24.4% sales growth and 31% earnings growth in 2025—the highest among the trio—thanks to:
- Strategic Expansion: Aggressive unit growth (120+ new locations planned by 2026) and a focus on high-margin digital orders.
- Resilient Demand: Same-restaurant sales are on track for 6-8% growth, fueled by its craveable dishes like Falafel Bowls and Mediterranean Platters.

Stock Performance: Shares have risen 15.2% YTD, but with a 5.5% earnings estimate upgrade over 60 days, there's more room to run. Historically, when similar upgrades occurred, CAVA's EPS surged by 83.3% in subsequent quarters, with net income jumping 83.7% over the same period—a strong precedent for the 6-12 month holding strategy recommended here.

BJ's Restaurants, Inc. (BJRI): Luxury Casual Dining with 23.8% Earnings Growth

BJRI's Zacks Rank #2 (Buy) reflects its ability to balance premium pricing with value-driven innovation. Key catalysts include:
- Menu Engineering: Its Pizookie Meal Deal (a dessert-focused combo) is driving traffic, while holiday large-party offerings boost average spend.
- Cost Discipline: Restaurant-level margins are projected to hit 24.8%-25.2% in 2025, even as labor costs rise.

Stock Performance: Shares have soared 23.1% YTD, and 9% earnings estimate upgrades in the last two months signal investor confidence. However, historical backtest data for BJRI under this specific scenario (earnings upgrades + 6-12 month holds) is limited, making long-term performance trends harder to gauge.

Wingstop Inc. (WING): AI-Powered Wings Leading a 16.6% Sales Surge

WING's Zacks Rank #2 (Buy) is powered by its operational innovation and digital-first strategy:
- Tech Edge: AI-driven kitchen systems cut quote times by 20%, enabling faster service during peak hours.
- Partnerships: Ties with digital platforms like DoorDash and Uber Eats are fueling off-premise sales, which now account for 40% of revenue.

Stock Performance: Shares have skyrocketed 42.6% in three months, and 6.3% earnings estimate upgrades underscore its growth trajectory. Historically, when such upgrades occurred, WING's EPS grew by 120% year-on-year, with its average analyst target rising to $321.36—a $79 premium to its current price. Analysts like Baird have even raised their price targets to $400, reflecting strong market confidence in this strategy.

The Zacks Rank: A Near-Term Buy Signal Investors Can't Ignore

All three stocks maintain a Zacks Rank #2 (Buy), which signals strong consensus among analysts that these stocks will outperform the market in the next 1-3 months. This ranking is reinforced by:
- Earnings Momentum: Each company has seen earnings estimates rise (CAVA +5.5%, BJRI +9%, WING +6.3%) in the last 60 days.
- Industry Outperformance: While the broader restaurant sector ranks #182 (bottom 26% of industries), these three are decoupling from sector averages via smart expansion and tech-driven efficiencies.

Backtest the performance of CAVA, BJRI, WING when 'earnings estimate upgrades occur within 60 days' and 'hold for 6-12 months', from 2020 to 2025.

Final Take: Time to Serve Up Profits

The dining renaissance is underway, and CAVA, BJRI, and WING are the best seats at the table. With cooling inflation, rising demand, and industry-leading strategies, these stocks offer a risk/reward sweet spot for investors.

Action Plan:
1. Buy now: All three stocks are undervalued relative to their growth trajectories.
2. Hold for 6-12 months: Benefit from their expansion plans and earnings upgrades—backed by historical outperformance for CAVA and WING in similar scenarios.

Don't miss this chance to profit from a sector that's finally regaining its appetite.

Data as of May 26, 2025. Past performance does not guarantee future results. Always conduct your own research or consult a financial advisor before making investment decisions.