Top 5 Restaurant Stocks Under $10

In this article, we will take a look at the top 5 restaurant stocks under $10. If you want to see some more of the stocks, go to the Top 10 Restaurant Stocks Under $10.

5. Carrols Restaurant Group, Inc. (NASDAQ:TAST)

Number of Hedge Fund Holders: 11

Stock Price: $1.68

Carrols Restaurant Group, Inc. (NASDAQ:TAST) is a Syracuse, New York-based company.

The company is the biggest franchisee of Burger King, with more than 1,000 locations across the world. Carrols Restaurant Group, Inc. (NASDAQ:TAST) provides exposure to a leading company like Burger King at a very low price. Furthermore, the company also has 55 Popeyes restaurants in its portfolio. In a research note issued to investors on September 22, Joshua Long at Stephens initiated coverage on Carrols Restaurant Group, Inc. (NASDAQ:TAST) stock with an Overweight rating and a target price of $4. The analyst has a bullish stance on the stock due to the improvement of Burger King’s brand image. The Miami, Florida-based fast food restaurant chain initiated the “Reclaim the Flame” strategic plan. Under the plan, Burger King intends to invest $400 million in the next two years in advertising and remodeling its restaurants, which is expected to expand Carrols Restaurant Group, Inc.’s (NASDAQ:TAST) margins.

Carrols Restaurant Group, Inc. (NASDAQ:TAST) stock is one of the best restaurant stocks that offers an attractive small-cap story and strong growth prospects. On the basis of EV to EBITDA and Price to Sales ratio, the company is significantly undervalued in comparison to its competitors.

4. Arcos Dorados Holdings Inc. (NYSE:ARCO)

Number of Hedge Fund Holders: 13

Stock Price: $7.47

Arcos Dorados Holdings Inc. (NYSE:ARCO) is a Buenos Aires, Argentina-based master franchise of McDonald’s in 20 Latin American and Caribbean countries.

We have picked Arcos Dorados Holdings Inc. (NYSE:ARCO) as one of the best restaurant stocks because it provides exposure to one of the biggest fast-food restaurant chain operators at a share price of less than $10. Arcos Dorados Holdings Inc. (NYSE:ARCO) is the biggest franchisee of McDonald’s, with 2,250 restaurants, and employs 90,000 workers.

Antonio Hernandez at Barclays started coverage on Arcos Dorados Holdings Inc. (NYSE:ARCO) stock with a target price of $9 and an Overweight rating on September 27. The analyst anticipates the company to gain market share as growth strategies start being implemented. Furthermore, Hernandez sees Arcos Dorados Holdings Inc. (NYSE:ARCO) stock trading at a significant discount against its five-year average P/E multiple.

3. Noodles & Company (NASDAQ:NDLS)

Number of Hedge Fund Holders: 15

Stock Price: $5.91

Noodles & Company (NASDAQ:NDLS) is a Broomfield, Colorado-based operator of fast-casual restaurants.

Joshua Long at Stephens started coverage on Noodles & Company (NASDAQ:NDLS) stock with a target price of $7 and an Overweight rating. The analyst believes the company offers an attractive growth story to investors in the limited-service restaurant category. The noodle-based menu acts as a differentiator for Noodles & Company (NASDAQ:NDLS), aiding the company in achieving healthy top-line growth. Furthermore, the growth of the digital channel is providing impetus to Noodles & Company’s (NASDAQ:NDLS) stock and creating more brand awareness. The company is also making constant changes to its menu to remain in line with the healthy eating habits of the young generation, making it one of the best restaurant stocks to hold for the long run.

Of the 895 hedge funds in Insider Monkey’s database, Noodles & Company (NASDAQ:NDLS) was held by 15 hedge funds as of Q2 2022.

2. Red Robin Gourmet Burgers, Inc. (NASDAQ:RRGB)

Number of Hedge Fund Holders: 18

Stock Price: $8.20

Red Robin Gourmet Burgers, Inc. (NASDAQ:RRGB) is a Greenwood Village, Colorado-based operator of casual dining restaurants.

Over 81% of the locations are company-owned, while the rest are franchisee-owned. Red Robin Gourmet Burgers, Inc. (NASDAQ:RRGB) operates on a high-low strategy that allows them to introduce innovative offerings for a limited time at a high price, resulting in healthy margins. Meanwhile, through attractive promotions, Red Robin Gourmet Burgers, Inc. (NASDAQ:RRGB) generates strong sales by attracting less affluent customers too. In Q3 2022, increased pricing and positive menu mix shifts drove the 4.2% gain in overall company revenue to $286.9 million, an increase of $11.4 million from the same period a year earlier. Furthermore, the company’s royalty membership program has expanded to include 11 million members as of Q3, allowing the company to increase brand loyalty by offering rewards to consumers.

As of Q2 2022, Red Robin Gourmet Burgers, Inc. (NASDAQ:RRGB) was held by 18 hedge funds.

1. Fiesta Restaurant Group, Inc. (NASDAQ:FRGI)

Number of Hedge Fund Holders: 19

Stock Price: $6.87

Fiesta Restaurant Group, Inc. (NASDAQ:FRGI) is a Dallas, Texas-based fast casual and quick service restaurant chain operator through its Pollo Tropical locations.

Fiesta Restaurant Group, Inc. (NASDAQ:FRGI) has remodeled its stores to enhance the customer experience. The company is also working on overcoming labor shortages by enhancing operational efficiency and preserving its value perceptions in the mind of cost-conscious consumers. Following the disposal of 148 locations of the Taco Cabana business unit to Yadav Enterprises for $85 million, Fiesta Restaurant Group, Inc. (NASDAQ:FRGI) intends to remain singularly focused. Fiesta Restaurant Group, Inc. (NASDAQ:FRGI) has worked on upgrading its drive-thru facilities and reopened curbside pickup at all its locations. Online check averages were more than 8% over the company average in Q2 2022, and comparable restaurant sales increased by 14.9% compared to the second quarter of 2021. Analysts think the management’s efforts to expand margins make Fiesta Restaurant Group, Inc. (NASDAQ:FRGI) one of the best restaurant stocks to buy now.

Factorial Partners raised its stake in Fiesta Restaurant Group, Inc. (NASDAQ:FRGI) by 31% during Q2 2022.

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