We recently compiled a list of the 10 High Growth Restaurant Stocks For 2025. In this article, we are going to take a look at where Chipotle Mexican Grill Inc. (NYSE:CMG) stands against the other high growth restaurant stocks.
Morgan Stanley recently published a report on the restaurant industry, suggesting that the tough environment that the industry is currently facing may ease out in 2025, though only modestly. Restaurants will have to continue working on providing value meals to consumers who continue to struggle to balance their income and expenses.
A balanced job market could help keep labor costs steady. However, a political campaign against immigration could be a potential headwind for the industry. A growing emphasis on robotics to improve efficiency and customer service could also play a key role in the industry’s development this year, though it is too early to determine the financial implications of these moves.
We decided to shortlist a few stocks that we believe could benefit from an improving industry environment in 2025. To come up with the list of 10 restaurant stocks with a high growth rate, we only considered stocks that have grown by more than 15% in the last 5 years or since IPO and have a market cap of at least $1 billion.
A chef plating up a wide variety of dishes for a restaurant chain.
Chipotle Mexican Grill Inc. (NYSE:CMG)
Chipotle Mexican Grill Inc. is a restaurant chain that provides Mexican-inspired food & beverages including burrito bowls, tacos, burritos, salads, and quesadillas. It also offers delivery and other related services through its app and website. The company has grown its sales by just over 15% in the last 5 years.
CMG continues to add more restaurants across the US, which increases its ability to generate more revenue. The comparable restaurant sales were up 11.1% in Q2 and 6% in Q3. There is no reason for the company to stop growing at the same rate in the near term.
What makes CMG even more impressive is its almost zero debt and balance sheet, which is the envy of many. Positive guidance and international growth set up the company well to bounce back from its recent poor performance. Moreover, CMG is incorporating robotics and AI in its workflows which will not only improve user experience but also help it enhance its bottom line.
Overall CMG ranks 3rd on our list of the high growth restaurant stocks for 2025. While we acknowledge the potential of CMG as an investment, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns, and doing so within a shorter timeframe. If you are looking for an AI stock that is as promising as CMG but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
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Disclosure: None. This article was originally published at Insider Monkey.
