The end of an earnings season can be a great time to assess how companies are handling the current business environment and discover new stocks. Let’s take a look at how Noodles (NASDAQ:NDLS) and the rest of the modern fast food stocks fared in Q4.
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 6 modern fast food stocks we track reported a strong Q4; on average, revenues beat analyst consensus estimates by 1.6% while next quarter’s revenue guidance was 2.8% above consensus. Stocks have been under pressure as inflation (despite slowing) makes their long-dated profits less valuable, but modern fast food stocks held their ground better than others, with the share prices up 22.4% on average since the previous earnings results.
Weakest Q4: 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 $124.3 million, down 8.9% year on year, falling short of analyst expectations by 0.8%. It was a weak quarter for the company, with full-year revenue guidance missing analysts’ expectations.
Noodles delivered the weakest performance against analyst estimates, slowest revenue growth, and weakest full-year guidance update of the whole group. The stock is down 19.8% since the results and currently trades at $1.97.
Read our full report on Noodles here, it’s free.
Best Q4: 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 $286.2 million, up 20% year on year, outperforming analyst expectations by 2.2%. It was a stunning quarter for the company, with an impressive beat across the board on all key metrics from sale-store sales to revenue to profits to EPS. FCF even came in higher than expected and was positive rather than the loss projected by Wall Street analysts.
The stock is up 33.7% since the results and currently trades at $104.24.
Is now the time to buy Shake Shack? Access our full analysis of the earnings results here, it’s free.
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 $125.7 million, up 4.7% year on year, in line with analyst expectations. It was a mixed quarter for the company, with an impressive beat of analysts’ gross margin estimates but a miss of analysts’ earnings estimates.
The stock is down 8.2% since the results and currently trades at $12.38.
Read our full analysis of Potbelly’s results here.
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 $2.52 billion, up 15.4% year on year, surpassing analyst expectations by 1.1%. It was a very strong quarter for the company, with an impressive beat of analysts’ revenue, same-store sales, and EPS estimates. The company’s outperformance was driven by strong year-on-year unit growth of 7.4%. It also got a pricing tailwind of 1.0% and opened more restaurants in the quarter than expected (121 vs estimates of 117).
The stock is up 17.2% since the results and currently trades at $2,923.
Read our full, actionable report on Chipotle here, it’s free.
Sweetgreen (NYSE:SG)
Founded in 2007 by three Georgetown University alum, Sweetgreen (NYSE:SG) is a casual quick service chain known for its healthy salads and bowls.
Sweetgreen reported revenues of $153 million, up 29.1% year on year, in line with analyst expectations. It was a strong quarter for the company, with revenue guidance for next quarter exceeding analysts’ expectations. While full year revenue guidance was in line, adjusted EBITDA was better than Wall Street estimates.
Sweetgreen delivered the fastest revenue growth and highest full-year guidance raise among its peers. The stock is up 99% since the results and currently trades at $25.39.
Read our full, actionable report on Sweetgreen here, it’s free.
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