As the Q3 earnings season comes to a close, it’s time to take stock of this quarter’s best and worst performers in the modern fast food industry, including Shake Shack (NYSE:SHAK) and its peers.

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 mixed Q3. As a group, revenues were in line with analysts’ consensus estimates.

In light of this news, share prices of the companies have held steady. On average, they are relatively unchanged since the latest earnings results.

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 $316.9 million, up 14.7% year on year. This print was in line with analysts’ expectations, and overall, it was a very strong quarter for the company with an impressive beat of analysts’ EPS estimates and a solid beat of analysts’ same-store sales estimates.

Interestingly, the stock is up 9% since reporting and currently trades at $123.90.

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

Best Q3: 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 $115.1 million, down 4.7% year on year, outperforming analysts’ expectations by 1.7%. The business had a stunning quarter with an impressive beat of analysts’ EPS and EBITDA estimates.

Potbelly achieved the biggest analyst estimates beat among its peers. The market seems happy with the results as the stock is up 20.7% since reporting. It currently trades at $9.96.

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

Weakest Q3: 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 $122.8 million, down 4% year on year, falling short of analysts’ expectations by 2.5%. It was a disappointing quarter as it posted a significant miss of analysts’ EBITDA and EPS estimates.

Noodles delivered the weakest performance against analyst estimates and weakest full-year guidance update in the group. As expected, the stock is down 37.9% since the results and currently trades at $0.75.

Read our full analysis of Noodles’s results here.

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 $173.4 million, up 13% year on year. This print lagged analysts' expectations by 1.2%. It was a slower quarter as it also logged a miss of analysts’ EBITDA estimates.

Sweetgreen achieved the highest full-year guidance raise among its peers. The stock is up 6.3% since reporting and currently trades at $44.90.

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

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 $2.79 billion, up 13% year on year. This number missed analysts’ expectations by 0.9%. More broadly, it was a mixed quarter as it also produced a narrow beat of analysts’ EBITDA estimates but same-store sales in line with analysts’ estimates.

The stock is up 3.3% since reporting and currently trades at $62.47.

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

Market Update

In response to the Fed's rate hikes in 2022 and 2023, inflation has been gradually trending down from its post-pandemic peak, trending closer to the Fed's 2% target. Despite higher borrowing costs, the economy has avoided flashing recessionary signals. This is the much-desired soft landing that many investors hoped for. The recent rate cuts (0.5% in September and 0.25% in November 2024) have bolstered the stock market, making 2024 a strong year for equities. Donald Trump’s presidential win in November sparked additional market gains, sending indices to record highs in the days following his victory. However, debates continue over possible tariffs and corporate tax adjustments, raising questions about economic stability in 2025.

Want to invest in winners with rock-solid fundamentals? Check out our Top 6 Stocks and add them to your watchlist. These companies are poised for growth regardless of the political or macroeconomic climate.

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