Chipotle vs. Cava: Which Fast-Casual Stock Is the Better Buy?
Monday, Nov 25, 2024 7:12 am ET
3min read In the fast-casual restaurant scene, two names have been making waves recently: Cava Group (CAVA) and Chipotle Mexican Grill (CMG). Both chains have unique offerings and impressive growth, but which one is the better investment opportunity right now?
Cava Group, a Mediterranean-themed fast-casual restaurant, has been reporting impressive growth. In the third quarter, its revenue grew 39% year over year, and its same-restaurant sales (comps) rose 18.1%. The company's earnings per share (EPS) grew 150% to $0.15. Cava's growth can be attributed to its popular menu and strong unit economics. It has also been expanding its store count, opening 11 new locations in the third quarter, bringing its total to 352.
Chipotle Mexican Grill, on the other hand, is a more established player in the fast-casual restaurant space. Its revenue grew 13% year over year in the same period, and its comps rose 6%. Chipotle's EPS grew 21.7% to $0.28. The company has a proven track record of growth and a strong brand. It ended the third quarter with nearly 3,600 locations.
When comparing the two companies, Cava's growth is more impressive, especially in terms of revenue and comps. However, Chipotle's valuation is more attractive. As of this writing, Chipotle's forward price-to-earnings (P/E) ratio is 54 times earnings, while Cava's is 284 times.
Ultimately, the choice between Chipotle and Cava depends on your investment goals and risk tolerance. If you're looking for a more established company with a proven track record, Chipotle might be the better choice. However, if you're willing to take on more risk for potentially higher growth, Cava could be the way to go.
In conclusion, both Chipotle and Cava have compelling investment opportunities. Chipotle's established brand and attractive valuation make it an appealing choice for conservative investors, while Cava's impressive growth and high valuation cater to those seeking more aggressive returns.
Cava Group, a Mediterranean-themed fast-casual restaurant, has been reporting impressive growth. In the third quarter, its revenue grew 39% year over year, and its same-restaurant sales (comps) rose 18.1%. The company's earnings per share (EPS) grew 150% to $0.15. Cava's growth can be attributed to its popular menu and strong unit economics. It has also been expanding its store count, opening 11 new locations in the third quarter, bringing its total to 352.
Chipotle Mexican Grill, on the other hand, is a more established player in the fast-casual restaurant space. Its revenue grew 13% year over year in the same period, and its comps rose 6%. Chipotle's EPS grew 21.7% to $0.28. The company has a proven track record of growth and a strong brand. It ended the third quarter with nearly 3,600 locations.
When comparing the two companies, Cava's growth is more impressive, especially in terms of revenue and comps. However, Chipotle's valuation is more attractive. As of this writing, Chipotle's forward price-to-earnings (P/E) ratio is 54 times earnings, while Cava's is 284 times.
Ultimately, the choice between Chipotle and Cava depends on your investment goals and risk tolerance. If you're looking for a more established company with a proven track record, Chipotle might be the better choice. However, if you're willing to take on more risk for potentially higher growth, Cava could be the way to go.
In conclusion, both Chipotle and Cava have compelling investment opportunities. Chipotle's established brand and attractive valuation make it an appealing choice for conservative investors, while Cava's impressive growth and high valuation cater to those seeking more aggressive returns.
Disclaimer: the above is a summary showing certain market information. AInvest is not responsible for any data errors, omissions or other information that may be displayed incorrectly as the data is derived from a third party source. Communications displaying market prices, data and other information available in this post are meant for informational purposes only and are not intended as an offer or solicitation for the purchase or sale of any security. Please do your own research when investing. All investments involve risk and the past performance of a security, or financial product does not guarantee future results or returns. Keep in mind that while diversification may help spread risk, it does not assure a profit, or protect against loss in a down market.
