Let’s dig into the relative performance of Chipotle (NYSE: CMG) and its peers as we unravel the now-completed Q1 modern fast food earnings season.

Modern fast food is a relatively newer category representing a middle ground between traditional fast food and sit-down restaurants. These establishments feature an expanded menu selection priced above traditional fast food options, often incorporating fresher and cleaner ingredients to serve customers prioritizing quality. These eateries are capitalizing on the perception that your drive-through burger and fries joint is detrimental to your health because of inferior ingredients.

The 7 modern fast food stocks we track reported a mixed Q1. As a group, revenues were in line with analysts’ consensus estimates.

Luckily, modern fast food stocks have performed well with share prices up 16.7% on average since the latest earnings results.

Chipotle (NYSE: CMG)

Born from a desire to offer quick meals with fresh, flavorful ingredients, Chipotle (NYSE: CMG) is a fast-food chain known for its healthy, Mexican-inspired cuisine and customizable dishes.

Chipotle reported revenues of $2.88 billion, up 6.4% year on year. This print fell short of analysts’ expectations by 2.1%. Overall, it was a slower quarter for the company with a miss of analysts’ same-store sales estimates.

"While our first quarter results were impacted by several headwinds including weather and a slowdown in consumer spending, our teams continue to make significant progress improving the execution in our restaurants, innovating our back of house, and building Chipotle into a global iconic brand," said Scott Boatwright, Chief Executive Officer, Chipotle.

Chipotle delivered the weakest performance against analyst estimates of the whole group. Interestingly, the stock is up 14.9% since reporting and currently trades at $56.00.

Is now the time to buy Chipotle? Access our full analysis of the earnings results here, it’s free.

Best Q1: Potbelly (NASDAQ: PBPB)

With a unique origin story where the company actually started as an antique shop, Potbelly (NASDAQ: PBPB) today is a chain known for its toasty sandwiches.

Potbelly reported revenues of $113.7 million, up 2.3% year on year, outperforming analysts’ expectations by 1.7%. The business had an exceptional quarter with an impressive beat of analysts’ EPS estimates and a solid beat of analysts’ EBITDA estimates.

Potbelly pulled off the biggest analyst estimates beat among its peers. The market seems happy with the results as the stock is up 48.9% since reporting. It currently trades at $12.71.

Is now the time to buy Potbelly? Access our full analysis of the earnings results here, it’s free.

Shake Shack (NYSE: SHAK)

Started as a hot dog cart in New York City's Madison Square Park, Shake Shack (NYSE: SHAK) is a fast-food restaurant known for its burgers and milkshakes.

Shake Shack reported revenues of $320.9 million, up 10.5% year on year, falling short of analysts’ expectations by 2%. It was a softer quarter as it posted a miss of analysts’ same-store sales and EBITDA estimates.

Interestingly, the stock is up 60.6% since the results and currently trades at $140.90.

Read our full analysis of Shake Shack’s results here.

Noodles (NASDAQ: NDLS)

Offering pasta, mac and cheese, pad thai, and more, Noodles & Company (NASDAQ: NDLS) is a casual restaurant chain that serves all manner of noodles from around the world.

Noodles reported revenues of $123.8 million, up 2% year on year. This number met analysts’ expectations. Aside from that, it was a slower quarter as it produced a significant miss of analysts’ EBITDA and EPS estimates.

Noodles pulled off the highest full-year guidance raise but had the slowest revenue growth among its peers. The stock is down 15.8% since reporting and currently trades at $0.85.

Read our full, actionable report on Noodles here, it’s free.

Wingstop (NASDAQ: WING)

The passion project of two chicken wing aficionados in Texas, Wingstop (NASDAQ: WING) is a popular fast-food chain known for its flavorful and crispy chicken wings offered in a variety of sauces and seasonings.

Wingstop reported revenues of $171.1 million, up 17.4% year on year. This result was in line with analysts’ expectations. However, it was a slower quarter as it recorded a miss of analysts’ EBITDA estimates and a slight miss of analysts’ same-store sales estimates.

The stock is up 44.9% since reporting and currently trades at $334.06.

Read our full, actionable report on Wingstop here, it’s free.

Market Update

As a result of the Fed’s rate hikes in 2022 and 2023, inflation has come down from frothy levels post-pandemic. The general rise in the price of goods and services is trending towards the Fed’s 2% goal as of late, which is good news. The higher rates that fought inflation also didn't slow economic activity enough to catalyze a recession. So far, soft landing. This, combined with recent rate cuts (half a percent in September 2024 and a quarter percent in November 2024) have led to strong stock market performance in 2024. The icing on the cake for 2024 returns was Donald Trump’s victory in the U.S. Presidential Election in early November, sending major indices to all-time highs in the week following the election. Still, debates around the health of the economy and the impact of potential tariffs and corporate tax cuts remain, leaving much uncertainty around 2025.

Want to invest in winners with rock-solid fundamentals? Check out our 9 Best Market-Beating Stocks and add them to your watchlist. These companies are poised for growth regardless of the political or macroeconomic climate.

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