In this article, we will be taking a look at the 5 best fast food stocks to buy according to analysts. To see more of these stocks, you can go directly to see the 11 Best Fast Food Stocks To Buy According to Analysts.
5. Dave & Buster’s Entertainment, Inc. (NASDAQ:PLAY)
Average Analyst Share Price Upside: 27.78%
Average Analyst Share Price Target: $71.67
Dave & Buster’s Entertainment, Inc. (NASDAQ:PLAY) is a Dallas-based American restaurant and entertainment enterprise known for its unique combination of dining, bar services, and arcade games, notably featuring the “Million Dollar Midway”. Recently, the company unveiled an updated dine-in menu, introducing over 20 new food and beverage options, alongside offering a 50% food discount to members of its rewards program. This initiative, part of Phase 3 of the company’s plan, aims to boost food and beverage sales.
In the fourth quarter of Fiscal Year 2023, Dave & Buster’s Entertainment, Inc. (NASDAQ:PLAY) reported revenue of $599.1 million, marking a 6.3% increase compared to the same period in the prior year. For the full fiscal year, revenue amounted to an impressive $2.2 billion, demonstrating robust year-over-year growth of 12.3%. However, the company faced challenges with comparable store sales, which declined by 7% in Q4 and by 6.2% for the full fiscal year.
As of the end of the December quarter, 21 hedge funds in Insider Monkey’s database of 933 hedge funds had stakes in Dave & Buster’s Entertainment, Inc. (NASDAQ:PLAY). The biggest stakeholder of Dave & Buster’s Entertainment, Inc. (NASDAQ:PLAY) was Scott Ross’s Hill Path Capital which had a $383.3 million stake in the company.
4. Papa John’s International, Inc. (NASDAQ:PZZA)
Average Analyst Share Price Upside: 30.20%
Average Analyst Share Price Target: $80.44
Papa John’s International, Inc. (NASDAQ:PZZA), operating as Papa John’s, is an American pizza restaurant chain ranked as one of the largest pizza delivery restaurant chains in the United States. It has headquarters in the Louisville, Kentucky, and Atlanta, Georgia metropolitan areas.
In its fourth-quarter 2023 results, Papa John’s International, Inc. (NASDAQ:PZZA) reported revenue of $2.1 billion, which closely aligned with analyst forecasts. However, the company exceeded expectations with statutory earnings per share of $2.48, surpassing analyst estimates by 3.5%.
According to Insider Monkey’s fourth quarter database, 19 hedge funds were bullish on Papa John’s International, Inc. (NASDAQ:PZZA), with collective stakes worth $36.5 million. Israel Englander’s Millennium Management is a notable position holder in the company, with 67,650 shares valued at $5.15 million.
Artisan Small Cap Fund made the following comment about Papa John’s International, Inc. (NASDAQ:PZZA) in its Q3 2023 investor letter:
“Notable trims in the quarter included Papa John’s International, Inc. (NASDAQ:PZZA) Advanced Drainage and BlackLine. Papa John’s is a global operator and franchisor of pizza delivery and carryout restaurants. We originally invested in the company after a complete executive management team overhaul— notably, hiring a CEO, Rob Lynch, to spearhead a turnaround. Mr. Lynch brings previous leadership experience at large franchisors Arby’s and Taco Bell—where he worked alongside current Chipotle CEO Brian Niccol—and a marketing background at P&G. At Arby’s, Mr. Lynch led a turnaround effort where he shaped the company’s successful “We have the meats!” marketing campaign. Mr. Lynch has focused on reestablishing Papa John’s premium positioning with new food options, advertising campaigns and operational cost-cutting measures meant to improve margins. While we continue to believe in the long-term turnaround story, it is taking longer than we had originally expected. We began to harvest the position to fund higher conviction ideas.”
3. Yum China Holdings, Inc. (NYSE:YUMC)
Average Analyst Share Price Upside: 35.22%
Average Analyst Share Price Target: $50.49
Yum China Holdings, Inc. (NYSE:YUMC), headquartered in Shanghai, stands as one of the largest restaurant companies in China, boasting over 14,000 restaurants spread across more than 1,900 cities on mainland China. The company emerged through a separation from Yum! Brands, Inc. (NYSE:YUM) in November 2016, subsequently listing its shares on the NYSE.
As of Q4 2023, Insider Monkey’s database revealed that 22 hedge funds, out of 933 tracked, held shares of Yum China Holdings, Inc. (NYSE:YUMC), with a combined value of $784 million. GuardCap Asset Management emerged as the largest shareholder, holding ownership of 8.83 million shares.
2. Jack in the Box Inc. (NASDAQ:JACK)
Average Analyst Share Price Upside: 45.21%
Average Analyst Share Price Target: $86.47
Founded in 1951 by Robert O. Peterson in San Diego, California, Jack in the Box Inc. (NASDAQ: JACK) is an American fast-food restaurant chain headquartered in the same city. With over 2,200 locations, it primarily serves the West Coast of the United States.
In March 2024, Jack in the Box Inc. (NASDAQ: JACK) received positive news when Wedbush upgraded its share rating from Neutral to Outperform and raised the share price target to $88 from $79.
Among the 933 hedge funds tracked by Insider Monkey’s Q4 2023 database, 21 had acquired and held shares of the company. The largest hedge fund shareholder of Jack in the Box Inc. (NASDAQ: JACK) in the database is Arrowstreet Capital, led by Peter Rathjens, Bruce Clarke, and John Campbell, with a $30.2 million investment.
1. Portillos Inc (NASDAQ:PTLO)
Average Analyst Share Price Upside: 67.72%
Average Analyst Share Price Target: $21.67
Portillos Inc. (NASDAQ:PTLO) is a fast-casual restaurant chain based in the Chicago area, renowned for its Chicago-style fare, including hot dogs, Maxwell Street Polish, and Italian beef.
In February, Portillos Inc. (NASDAQ:PTLO) announced its Q4 results. The company reported an adjusted EPS of $0.13 for the period, surpassing estimates by $0.07. Additionally, revenue for the period experienced a substantial 24.5% year-over-year increase, reaching $187.9 million, which exceeded estimates by $3.68 million.
A total of 19 hedge funds in Insider Monkey’s database of 933 funds had stakes in Portillos Inc (NASDAQ:PTLO). The biggest hedge fund stakeholder of Portillos Inc (NASDAQ:PTLO) during this period was William B. Gray’s Orbis Investment Management which owns a $83.24 million stake in Portillos Inc (NASDAQ:PTLO).
Disclosure: None. You can also take a look at 13 Best Stocks To Buy and Hold Forever and The 10 Most Diversified Stocks That Hedge Funds Love.
Insider Monkey focuses on uncovering the best investment ideas of hedge funds and investors. Please subscribe to our daily free newsletter to get the latest investment ideas from hedge funds’ investor letters by entering your email address below.
