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Yahoo
02-05-2025
- Business
- Yahoo
Is Wingstop Inc. (WING) Among the Best Fast Food Stocks to Buy Now?
We recently compiled a list of the 12 Best Fast Food Stocks to Buy Now. In this article, we are going to take a look at where Wingstop Inc. (NASDAQ:WING) stands against the other fast food stocks. Fast food stocks are businesses that run quick-service restaurants. These stocks can be a smart option to invest in the restaurant industry, which tends to perform well even during economic downturns due to its low costs and convenience. For example, the early COVID-19 pandemic was not favorable for the restaurant business overall, but fast-food chains that were able to offer curbside pickup, delivery, and drive-thru services performed better than their competitors that relied on dine-in. A challenging economic situation presents fewer risks because many fast-food restaurants prioritize providing great value. As per a research report, the global fast food market has expanded gradually in recent years. It will grow at a compound annual growth rate (CAGR) of 2.9%, from $645.2 billion in 2024 to $663.92 billion in 2025. Changes in customer choices and lifestyles, rapid urbanization, globalization, greater demand for convenience meals, and an increase in the working population have all contributed to historic expansion. The fast-food market's largest region in 2024 was North America. Asia-Pacific is anticipated to be the fastest-growing region over the projection period. Automation is changing the fast-food service business in the United States. Robotic systems and artificial intelligence tools are now reducing production times and increasing efficiency. Complex beverage preparation time has been reduced from 87 to just 36 seconds due to a new drink-making system. In the meantime, a dual-sided grill has sped up cooking by 70% in high-volume locations, and an avocado-processing robot reduces prep time by 50%. According to a National Restaurant Association research released in February 2023, 58% of restaurant operators anticipated that 2023 would see a rise in the usage of technology and automation to cope with labor shortages. In a May 2023 poll, HungerRush found that 36 percent of 1,000 Americans stated they believed that large restaurant chains lacked enough employees to process orders, make food, and deliver food. Chief information officer Aaron Nilsson of Jet's Pizza, a franchise with locations in Michigan, introduced a phone bot driven by artificial intelligence to take orders for pizza. He stated: 'Now most consumers expect their local pizza place and their favorite coffee house to remember their last order, know what credit card they want to use, and make it quick and easy for them to complete an order. Society has moved on and automation is expected – even from the small-time operator.' According to a 2024 LendingTree survey, 78% of Americans now consider fast food a luxury, with prices rising by more than 60% since 2014. Quick-service restaurants (QSRs) have been compelled by this change to reconsider what value is. Companies are prioritizing quality, convenience, and technology over price competition to defend higher prices. According to Savneet Singh, CEO of a significant restaurant technology business, the value today isn't just about price; it's about the entire experience. Moreover, technology is being used by businesses to improve this perceived value. AI-powered kiosks, drive-thru technology, and mobile ordering shorten wait times and customize service, while kitchen automation increases reliability. These days, loyalty programs use data analytics to provide hyper-personalized rewards, which boosts consumer engagement and encourages repeat visits. However, affordability is still crucial. The expense of fast food has caused 62% of consumers to cut back on their purchases, which has led several businesses to bring back $5 meal offers, as per the LendingTree study. A combination of price, quality, convenience, and personalization is the new QSR value equation. QSRs have the potential to redefine luxury as intelligent, easily accessible service by utilizing technology and loyalty. Customers savoring boneless wings at a bustling restaurant owned by the company. For this article, we sifted through the online rankings to form an initial list of the 20 Fast Food Stocks. From the resultant dataset, we chose 12 stocks with the highest number of hedge fund investors, using Insider Monkey's database of 1,009 hedge funds in Q4 2024 to gauge hedge fund sentiment for stocks. We have used the stock's revenue growth year-over-year as a tie-breaker in case two or more stocks have the same number of hedge funds invested. Why are we interested in the stocks that hedge funds pile into? The reason is simple: our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds. Our quarterly newsletter's strategy selects 14 small-cap and large-cap stocks every quarter and has returned 275% since May 2014, beating its benchmark by 150 percentage points. (see more details here). Number of Hedge Fund Holders: 36 Wingstop Inc. (NASDAQ:WING) is a rapidly expanding restaurant chain with over 2,550 locations that operates on a franchise basis with a $10,000 initial deposit per outlet. One of its main points of differentiation is its dedication to using fresh food preparation methods, eliminating heat lamps, and making sure that everything is prepared on-site, including sandwiches and hand-diced carrots. The business intends to open 4,000 outlets abroad and 6,000 in the United States as part of its ambitious expansion plans. In terms of financial efficiency, Wingstop Inc. (NASDAQ:WING) outperforms several of its competitors on the basis of return on capital. Often viewed as a rival to McDonald's, competitors such as Shake Shack are far less effective. The company's fiscal 2024 financials set a new record, marking the 21st straight year that same-store sales had grown and making it one of the Best Food Stocks. Domestic same-store sales rose 19.9%, primarily due to transaction growth, while system-wide sales rose 36.8% to $4.8 billion. Additionally, it reported an adjusted EBITDA of $212 million, a 44.8% rise. Wingstop Inc. (NASDAQ:WING) showed strong franchisee demand by adding a record 349 restaurant sites to its portfolio in 2024, achieving its goal of exceeding 10,000 units. As it maintained its excellent momentum, the firm recorded a 10.1% increase in same-store sales for Q4 and a 70% increase in digital sales. My Wingstop, the company's in-house IT stack, played a significant role in boosting interaction and expanding its digital database to more than 50 million clients. Furthermore, Wingstop Inc. (NASDAQ:WING) saw an increase in brand awareness and reach among younger consumers as a result of its strategic alliances with the NFL, NBA, and WWE. Overall, WING ranks 6th on our list of the 12 Best Fast Food Stocks to Buy Now. While we acknowledge the potential of Fast Food companies, our conviction lies in the belief that AI stocks hold greater promise for delivering higher returns and doing so within a shorter time frame. There is an AI stock that went up since the beginning of 2025, while popular AI stocks lost around 25%. If you are looking for an AI stock that is more promising than WING but that trades at less than 5 times its earnings, check out our report about this . READ NEXT: 20 Best AI Stocks To Buy Now and 30 Best Stocks to Buy Now According to Billionaires. Disclosure: None. This article is originally published at Insider Monkey. Sign in to access your portfolio
Yahoo
02-05-2025
- Business
- Yahoo
Is Chipotle Mexican Grill, Inc. (CMG) the Best Fast Food Stocks to Buy Now?
We recently compiled a list of the 12 Best Fast Food Stocks to Buy Now. In this article, we are going to take a look at where Chipotle Mexican Grill, Inc. (NYSE:CMG) stands against the other fast food stocks. Fast food stocks are businesses that run quick-service restaurants. These stocks can be a smart option to invest in the restaurant industry, which tends to perform well even during economic downturns due to its low costs and convenience. For example, the early COVID-19 pandemic was not favorable for the restaurant business overall, but fast-food chains that were able to offer curbside pickup, delivery, and drive-thru services performed better than their competitors that relied on dine-in. A challenging economic situation presents fewer risks because many fast-food restaurants prioritize providing great value. As per a research report, the global fast food market has expanded gradually in recent years. It will grow at a compound annual growth rate (CAGR) of 2.9%, from $645.2 billion in 2024 to $663.92 billion in 2025. Changes in customer choices and lifestyles, rapid urbanization, globalization, greater demand for convenience meals, and an increase in the working population have all contributed to historic expansion. The fast-food market's largest region in 2024 was North America. Asia-Pacific is anticipated to be the fastest-growing region over the projection period. Automation is changing the fast-food service business in the United States. Robotic systems and artificial intelligence tools are now reducing production times and increasing efficiency. Complex beverage preparation time has been reduced from 87 to just 36 seconds due to a new drink-making system. In the meantime, a dual-sided grill has sped up cooking by 70% in high-volume locations, and an avocado-processing robot reduces prep time by 50%. According to a National Restaurant Association research released in February 2023, 58% of restaurant operators anticipated that 2023 would see a rise in the usage of technology and automation to cope with labor shortages. In a May 2023 poll, HungerRush found that 36 percent of 1,000 Americans stated they believed that large restaurant chains lacked enough employees to process orders, make food, and deliver food. Chief information officer Aaron Nilsson of Jet's Pizza, a franchise with locations in Michigan, introduced a phone bot driven by artificial intelligence to take orders for pizza. He stated: 'Now most consumers expect their local pizza place and their favorite coffee house to remember their last order, know what credit card they want to use, and make it quick and easy for them to complete an order. Society has moved on and automation is expected – even from the small-time operator.' According to a 2024 LendingTree survey, 78% of Americans now consider fast food a luxury, with prices rising by more than 60% since 2014. Quick-service restaurants (QSRs) have been compelled by this change to reconsider what value is. Companies are prioritizing quality, convenience, and technology over price competition to defend higher prices. According to Savneet Singh, CEO of a significant restaurant technology business, the value today isn't just about price; it's about the entire experience. Moreover, technology is being used by businesses to improve this perceived value. AI-powered kiosks, drive-thru technology, and mobile ordering shorten wait times and customize service, while kitchen automation increases reliability. These days, loyalty programs use data analytics to provide hyper-personalized rewards, which boosts consumer engagement and encourages repeat visits. However, affordability is still crucial. The expense of fast food has caused 62% of consumers to cut back on their purchases, which has led several businesses to bring back $5 meal offers, as per the LendingTree study. A combination of price, quality, convenience, and personalization is the new QSR value equation. QSRs have the potential to redefine luxury as intelligent, easily accessible service by utilizing technology and loyalty. A chef plating up a wide variety of dishes for a restaurant chain. For this article, we sifted through the online rankings to form an initial list of the 20 Fast Food Stocks. From the resultant dataset, we chose 12 stocks with the highest number of hedge fund investors, using Insider Monkey's database of 1,009 hedge funds in Q4 2024 to gauge hedge fund sentiment for stocks. We have used the stock's revenue growth year-over-year as a tie-breaker in case two or more stocks have the same number of hedge funds invested. Why are we interested in the stocks that hedge funds pile into? The reason is simple: our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds. Our quarterly newsletter's strategy selects 14 small-cap and large-cap stocks every quarter and has returned 275% since May 2014, beating its benchmark by 150 percentage points. (see more details here). Number of Hedge Fund Holders: 83 Chipotle Mexican Grill, Inc. (NYSE:CMG) is the largest fast-casual restaurant brand in the United States, with projected systemwide revenues of $11.3 billion by 2024. By the end of 2024, it had 3,726 stores spread over the United States, with a minor presence in Canada, the United Kingdom, France, and Germany. The company serves burritos, burrito bowls, tacos, quesadillas, and drinks. The company's entire revenue comes from restaurant sales and delivery fees. The five pillars of Chipotle Mexican Grill, Inc. (NYSE:CMG)'s business strategy are operating profitable restaurants; luring and keeping varied talent; establishing the brand as well-known, relevant, and adored; making significant investments in restaurant technology and innovation; and improving consumer accessibility and convenience. Morningstar analysts believe that the company has established a long-lasting niche in the US restaurant market by drawing customers away from both casual dining and traditional fast-food rivals with its affordable menu prices, exceptional convenience, and 'food with integrity.' In the first quarter of 2025, Chipotle Mexican Grill, Inc. (NYSE:CMG)'s sales surged 6.4% to $2.9 billion due to restaurant openings, making it the Best Food Stock. However, comparable store sales decreased 0.4% as a result of fewer transactions. The operating margin at the restaurant level dropped 130 basis points to 26.2%. ClearBridge Growth Strategy stated the following regarding Chipotle Mexican Grill, Inc. (NYSE:CMG) in its Q4 2024 investor letter: 'We also initiated a position in fast casual restaurant chain Chipotle Mexican Grill, Inc. (NYSE:CMG). The recent pullback in shares related to a moderation in industry-wide restaurant sales and CEO Brian Niccol's August departure created an attractive entry point into a company with industry-leading unit economics in a still underpenetrated market. Chipotle plans to double its store footprint over time while executing initiatives to increase volume growth through technology enhancements, reduced mobile order friction and higher production during peak hours. Better throughput, technological integration and improved mix should help to drive continued margin expansion. Chipotle further diversifies the portfolio, adding to consumer discretionary where we have historically had less exposure.' Overall, CMG ranks 1st on our list of the 12 Best Fast Food Stocks to Buy Now. While we acknowledge the potential of Fast Food companies, our conviction lies in the belief that AI stocks hold greater promise for delivering higher returns and doing so within a shorter time frame. There is an AI stock that went up since the beginning of 2025, while popular AI stocks lost around 25%. If you are looking for an AI stock that is more promising than CMG but that trades at less than 5 times its earnings, check out our report about this . READ NEXT: 20 Best AI Stocks To Buy Now and 30 Best Stocks to Buy Now According to Billionaires. Disclosure: None. This article is originally published at Insider Monkey. Sign in to access your portfolio
Yahoo
02-05-2025
- Business
- Yahoo
Is McDonald's Corporation (MCD) Among the Best Fast Food Stocks to Buy Now?
We recently compiled a list of the 12 Best Fast Food Stocks to Buy Now. In this article, we are going to take a look at where McDonald's Corporation (NYSE:MCD) stands against the other fast food stocks. Fast food stocks are businesses that run quick-service restaurants. These stocks can be a smart option to invest in the restaurant industry, which tends to perform well even during economic downturns due to its low costs and convenience. For example, the early COVID-19 pandemic was not favorable for the restaurant business overall, but fast-food chains that were able to offer curbside pickup, delivery, and drive-thru services performed better than their competitors that relied on dine-in. A challenging economic situation presents fewer risks because many fast-food restaurants prioritize providing great value. As per a research report, the global fast food market has expanded gradually in recent years. It will grow at a compound annual growth rate (CAGR) of 2.9%, from $645.2 billion in 2024 to $663.92 billion in 2025. Changes in customer choices and lifestyles, rapid urbanization, globalization, greater demand for convenience meals, and an increase in the working population have all contributed to historic expansion. The fast-food market's largest region in 2024 was North America. Asia-Pacific is anticipated to be the fastest-growing region over the projection period. Automation is changing the fast-food service business in the United States. Robotic systems and artificial intelligence tools are now reducing production times and increasing efficiency. Complex beverage preparation time has been reduced from 87 to just 36 seconds due to a new drink-making system. In the meantime, a dual-sided grill has sped up cooking by 70% in high-volume locations, and an avocado-processing robot reduces prep time by 50%. According to a National Restaurant Association research released in February 2023, 58% of restaurant operators anticipated that 2023 would see a rise in the usage of technology and automation to cope with labor shortages. In a May 2023 poll, HungerRush found that 36 percent of 1,000 Americans stated they believed that large restaurant chains lacked enough employees to process orders, make food, and deliver food. Chief information officer Aaron Nilsson of Jet's Pizza, a franchise with locations in Michigan, introduced a phone bot driven by artificial intelligence to take orders for pizza. He stated: 'Now most consumers expect their local pizza place and their favorite coffee house to remember their last order, know what credit card they want to use, and make it quick and easy for them to complete an order. Society has moved on and automation is expected – even from the small-time operator.' According to a 2024 LendingTree survey, 78% of Americans now consider fast food a luxury, with prices rising by more than 60% since 2014. Quick-service restaurants (QSRs) have been compelled by this change to reconsider what value is. Companies are prioritizing quality, convenience, and technology over price competition to defend higher prices. According to Savneet Singh, CEO of a significant restaurant technology business, the value today isn't just about price; it's about the entire experience. Moreover, technology is being used by businesses to improve this perceived value. AI-powered kiosks, drive-thru technology, and mobile ordering shorten wait times and customize service, while kitchen automation increases reliability. These days, loyalty programs use data analytics to provide hyper-personalized rewards, which boosts consumer engagement and encourages repeat visits. However, affordability is still crucial. The expense of fast food has caused 62% of consumers to cut back on their purchases, which has led several businesses to bring back $5 meal offers, as per the LendingTree study. A combination of price, quality, convenience, and personalization is the new QSR value equation. QSRs have the potential to redefine luxury as intelligent, easily accessible service by utilizing technology and loyalty. A cook in a busy kitchen assembling cheeseburgers for orders. For this article, we sifted through the online rankings to form an initial list of the 20 Fast Food Stocks. From the resultant dataset, we chose 12 stocks with the highest number of hedge fund investors, using Insider Monkey's database of 1,009 hedge funds in Q4 2024 to gauge hedge fund sentiment for stocks. We have used the stock's revenue growth year-over-year as a tie-breaker in case two or more stocks have the same number of hedge funds invested. Why are we interested in the stocks that hedge funds pile into? The reason is simple: our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds. Our quarterly newsletter's strategy selects 14 small-cap and large-cap stocks every quarter and has returned 275% since May 2014, beating its benchmark by 150 percentage points. (see more details here). Number of Hedge Fund Holders: 67 McDonald's Corporation (NYSE:MCD) is a multinational fast food business with almost 43,000 outlets worldwide. The Wall Street Journal has pointed out that the business, which is well-known throughout the world for its golden arches, is actively pursuing artificial intelligence. AI has potential in several areas for a fast-food giant like McDonald's. Around 18 months ago, the company formed a collaboration with Alphabet's Google Cloud, with a particular focus on AI. AI-powered ordering has already been tested by the company, and a new partnership might help it expand those efforts. AI has the potential to reduce labor costs while improving consumer satisfaction if it is successful in processing orders. It is ranked second on our list of the Best Food Stocks. The E. Coli outbreak contributed to McDonald's Corporation (NYSE:MCD) lower-than-expected quarterly earnings despite the company's innovation drive, but there were other challenges as well. Revenue in Q4 2024 was $6.4 billion, which was around $88 million less than analyst projections and a slight 0.2% decline from the previous year. Performance at established locations is reflected in global same-store sales, which grew by 0.4%. US same-store sales, on the other hand, fell 1.4%, showing a slowdown in domestic growth and continued pressure to keep up momentum. Nonetheless, it is among the stocks that have performed well this year, rising more than 8% since the beginning of 2025, making it one of the Best Food Stocks. At the end of FY24, McDonald's Corporation (NYSE:MCD) had more than $1 billion in cash and cash equivalents, demonstrating a healthy cash reserve. The company's dividends have increased for 48 years in a row. Overall, MCD ranks 2nd on our list of the 12 Best Fast Food Stocks to Buy Now. While we acknowledge the potential of Fast Food companies, our conviction lies in the belief that AI stocks hold greater promise for delivering higher returns and doing so within a shorter time frame. There is an AI stock that went up since the beginning of 2025, while popular AI stocks lost around 25%. If you are looking for an AI stock that is more promising than MCD but that trades at less than 5 times its earnings, check out our report about this . READ NEXT: 20 Best AI Stocks To Buy Now and 30 Best Stocks to Buy Now According to Billionaires. Disclosure: None. This article is originally published at Insider Monkey.
Yahoo
02-05-2025
- Business
- Yahoo
Is Yum China Holdings, Inc. (YUMC) Among the Best Fast Food Stocks to Buy Now?
We recently compiled a list of the 12 Best Fast Food Stocks to Buy Now. In this article, we are going to take a look at where Yum China Holdings, Inc. (NYSE:YUMC) stands against the other fast food stocks. Fast food stocks are businesses that run quick-service restaurants. These stocks can be a smart option to invest in the restaurant industry, which tends to perform well even during economic downturns due to its low costs and convenience. For example, the early COVID-19 pandemic was not favorable for the restaurant business overall, but fast-food chains that were able to offer curbside pickup, delivery, and drive-thru services performed better than their competitors that relied on dine-in. A challenging economic situation presents fewer risks because many fast-food restaurants prioritize providing great value. As per a research report, the global fast food market has expanded gradually in recent years. It will grow at a compound annual growth rate (CAGR) of 2.9%, from $645.2 billion in 2024 to $663.92 billion in 2025. Changes in customer choices and lifestyles, rapid urbanization, globalization, greater demand for convenience meals, and an increase in the working population have all contributed to historic expansion. The fast-food market's largest region in 2024 was North America. Asia-Pacific is anticipated to be the fastest-growing region over the projection period. Automation is changing the fast-food service business in the United States. Robotic systems and artificial intelligence tools are now reducing production times and increasing efficiency. Complex beverage preparation time has been reduced from 87 to just 36 seconds due to a new drink-making system. In the meantime, a dual-sided grill has sped up cooking by 70% in high-volume locations, and an avocado-processing robot reduces prep time by 50%. According to a National Restaurant Association research released in February 2023, 58% of restaurant operators anticipated that 2023 would see a rise in the usage of technology and automation to cope with labor shortages. In a May 2023 poll, HungerRush found that 36 percent of 1,000 Americans stated they believed that large restaurant chains lacked enough employees to process orders, make food, and deliver food. Chief information officer Aaron Nilsson of Jet's Pizza, a franchise with locations in Michigan, introduced a phone bot driven by artificial intelligence to take orders for pizza. He stated: 'Now most consumers expect their local pizza place and their favorite coffee house to remember their last order, know what credit card they want to use, and make it quick and easy for them to complete an order. Society has moved on and automation is expected – even from the small-time operator.' According to a 2024 LendingTree survey, 78% of Americans now consider fast food a luxury, with prices rising by more than 60% since 2014. Quick-service restaurants (QSRs) have been compelled by this change to reconsider what value is. Companies are prioritizing quality, convenience, and technology over price competition to defend higher prices. According to Savneet Singh, CEO of a significant restaurant technology business, the value today isn't just about price; it's about the entire experience. Moreover, technology is being used by businesses to improve this perceived value. AI-powered kiosks, drive-thru technology, and mobile ordering shorten wait times and customize service, while kitchen automation increases reliability. These days, loyalty programs use data analytics to provide hyper-personalized rewards, which boosts consumer engagement and encourages repeat visits. However, affordability is still crucial. The expense of fast food has caused 62% of consumers to cut back on their purchases, which has led several businesses to bring back $5 meal offers, as per the LendingTree study. A combination of price, quality, convenience, and personalization is the new QSR value equation. QSRs have the potential to redefine luxury as intelligent, easily accessible service by utilizing technology and loyalty. The iconic yellow and red roof of a franchise restaurant in the bustling streets of a city. For this article, we sifted through the online rankings to form an initial list of the 20 Fast Food Stocks. From the resultant dataset, we chose 12 stocks with the highest number of hedge fund investors, using Insider Monkey's database of 1,009 hedge funds in Q4 2024 to gauge hedge fund sentiment for stocks. We have used the stock's revenue growth year-over-year as a tie-breaker in case two or more stocks have the same number of hedge funds invested. Why are we interested in the stocks that hedge funds pile into? The reason is simple: our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds. Our quarterly newsletter's strategy selects 14 small-cap and large-cap stocks every quarter and has returned 275% since May 2014, beating its benchmark by 150 percentage points. (see more details here). Number of Hedge Fund Holders: 29 Yum China Holdings, Inc. (NYSE:YUMC) is China's biggest restaurant operator, with over 16,000 locations and system-wide sales of about $12 billion in 2024. It generates revenue from franchise fees and its own eateries. The firm, which separated from Yum Brands in October 2016, pays 3% of systemwide sales as a trademark licensee. It owns, operates, and franchises restaurants in China under the brand names KFC, Pizza Hut, and Taco Bell. It is among the Best Food Stocks. The company gave $1.5 billion to shareholders in 2024, which included $1.24 billion in share buybacks and $248 million in dividends, lowering the number of outstanding shares by more than 31 million. The business concluded 2024 with $2.8 billion in net cash and $714 million in free cash flow. Given its excellent financial position, Yum China Holdings, Inc. (NYSE:YUMC) is boosting its quarterly dividend by 50% to $0.24 per share, pushing its payment ratio beyond 40% of expected 2024 diluted earnings per share. Chen Luo, a BofA analyst, maintained his Buy recommendation on Yum China Holdings, Inc. (NYSE:YUMC)'s shares and increased his price objective from $57.50 to $60.50. The company adjusted its forecasts for same-store sales growth and margin, which resulted in only minor adjustments to EPS projections. Additionally, the company raised its target multiples in its blended valuation, which fueled its higher price objective. In a preview, the analyst informs investors that the company anticipates a 'solid' first quarter. Overall, YUMC ranks 12th on our list of the 12 Best Fast Food Stocks to Buy Now. While we acknowledge the potential of Fast Food companies, our conviction lies in the belief that AI stocks hold greater promise for delivering higher returns and doing so within a shorter time frame. There is an AI stock that went up since the beginning of 2025, while popular AI stocks lost around 25%. If you are looking for an AI stock that is more promising than YUMC but that trades at less than 5 times its earnings, check out our report about this . READ NEXT: 20 Best AI Stocks To Buy Now and 30 Best Stocks to Buy Now According to Billionaires. Disclosure: None. This article is originally published at Insider Monkey.
Yahoo
02-05-2025
- Business
- Yahoo
Is Shake Shack Inc. (SHAK) Among the Best Fast Food Stocks to Buy Now?
We recently compiled a list of the 12 Best Fast Food Stocks to Buy Now. In this article, we are going to take a look at where Shake Shack Inc. (NYSE:SHAK) stands against the other fast food stocks. Fast food stocks are businesses that run quick-service restaurants. These stocks can be a smart option to invest in the restaurant industry, which tends to perform well even during economic downturns due to its low costs and convenience. For example, the early COVID-19 pandemic was not favorable for the restaurant business overall, but fast-food chains that were able to offer curbside pickup, delivery, and drive-thru services performed better than their competitors that relied on dine-in. A challenging economic situation presents fewer risks because many fast-food restaurants prioritize providing great value. As per a research report, the global fast food market has expanded gradually in recent years. It will grow at a compound annual growth rate (CAGR) of 2.9%, from $645.2 billion in 2024 to $663.92 billion in 2025. Changes in customer choices and lifestyles, rapid urbanization, globalization, greater demand for convenience meals, and an increase in the working population have all contributed to historic expansion. The fast-food market's largest region in 2024 was North America. Asia-Pacific is anticipated to be the fastest-growing region over the projection period. Automation is changing the fast-food service business in the United States. Robotic systems and artificial intelligence tools are now reducing production times and increasing efficiency. Complex beverage preparation time has been reduced from 87 to just 36 seconds due to a new drink-making system. In the meantime, a dual-sided grill has sped up cooking by 70% in high-volume locations, and an avocado-processing robot reduces prep time by 50%. According to a National Restaurant Association research released in February 2023, 58% of restaurant operators anticipated that 2023 would see a rise in the usage of technology and automation to cope with labor shortages. In a May 2023 poll, HungerRush found that 36 percent of 1,000 Americans stated they believed that large restaurant chains lacked enough employees to process orders, make food, and deliver food. Chief information officer Aaron Nilsson of Jet's Pizza, a franchise with locations in Michigan, introduced a phone bot driven by artificial intelligence to take orders for pizza. He stated: 'Now most consumers expect their local pizza place and their favorite coffee house to remember their last order, know what credit card they want to use, and make it quick and easy for them to complete an order. Society has moved on and automation is expected – even from the small-time operator.' According to a 2024 LendingTree survey, 78% of Americans now consider fast food a luxury, with prices rising by more than 60% since 2014. Quick-service restaurants (QSRs) have been compelled by this change to reconsider what value is. Companies are prioritizing quality, convenience, and technology over price competition to defend higher prices. According to Savneet Singh, CEO of a significant restaurant technology business, the value today isn't just about price; it's about the entire experience. Moreover, technology is being used by businesses to improve this perceived value. AI-powered kiosks, drive-thru technology, and mobile ordering shorten wait times and customize service, while kitchen automation increases reliability. These days, loyalty programs use data analytics to provide hyper-personalized rewards, which boosts consumer engagement and encourages repeat visits. However, affordability is still crucial. The expense of fast food has caused 62% of consumers to cut back on their purchases, which has led several businesses to bring back $5 meal offers, as per the LendingTree study. A combination of price, quality, convenience, and personalization is the new QSR value equation. QSRs have the potential to redefine luxury as intelligent, easily accessible service by utilizing technology and loyalty. A cook in a busy kitchen preparing a delicious cooking of burgers and fries. For this article, we sifted through the online rankings to form an initial list of the 20 Fast Food Stocks. From the resultant dataset, we chose 12 stocks with the highest number of hedge fund investors, using Insider Monkey's database of 1,009 hedge funds in Q4 2024 to gauge hedge fund sentiment for stocks. We have used the stock's revenue growth year-over-year as a tie-breaker in case two or more stocks have the same number of hedge funds invested. Why are we interested in the stocks that hedge funds pile into? The reason is simple: our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds. Our quarterly newsletter's strategy selects 14 small-cap and large-cap stocks every quarter and has returned 275% since May 2014, beating its benchmark by 150 percentage points. (see more details here). Number of Hedge Fund Holders: 43 Shake Shack Inc. (NYSE:SHAK) operates a roadside burger business. It offers a standard American menu that includes quality burgers, hot dogs, crispy chicken, frozen custard, crinkle-cut fries, shakes, beer, and wine. The company uses a whole-muscle combination of all-natural Angus beef that is devoid of hormones and antibiotics. The beef is ground fresh every day, cooked to order, and served on a potato bun that has not been genetically modified. Its menu consists of a variety of traditional American foods and drinks. It is ranked fifth on our list of the Best Food Stocks. In its most recent fourth-quarter earnings report, Shake Shack Inc. (NYSE:SHAK) posted adjusted earnings per share (EPS) of $0.26, $0.10 more than analysts had predicted. The company's quarterly revenue of $328.7 million was marginally higher than the $325.3 million average expectation. The revenue jumped by about 15% YoY. Sales at company-owned and franchised outlets combined came to $500.7 million, which was roughly $1.5 million less than anticipated. The stock of the firm jumped more than 9% on February 20 after the earnings announcement. Truist maintained its Buy recommendation on Shake Shack Inc. (NYSE:SHAK) shares and increased its price objective from $143 to $154. In a research note, the analyst informs investors of the company's strong Q1 comps expectations, Q4 earnings beat, and higher FY25 adjusted EBITDA guidance. The company notes that its excellent positioning is shown by the company's sustained same-store sales growth into Q1 despite weather and wildfire headwinds, a mismatched promotion, and an uncertain macroeconomic backdrop. Overall, SHAK ranks 5th on our list of the 12 Best Fast Food Stocks to Buy Now. While we acknowledge the potential of Fast Food companies, our conviction lies in the belief that AI stocks hold greater promise for delivering higher returns and doing so within a shorter time frame. There is an AI stock that went up since the beginning of 2025, while popular AI stocks lost around 25%. If you are looking for an AI stock that is more promising than SHAK but that trades at less than 5 times its earnings, check out our report about this . READ NEXT: 20 Best AI Stocks To Buy Now and 30 Best Stocks to Buy Now According to Billionaires. Disclosure: None. This article is originally published at Insider Monkey. Sign in to access your portfolio
