Chipotle vs. Shake Shack: Which Stock Is Better To Make Money (For Future Food Cravings)
Written by
Gina Hagler
Edited by
Jairo Rodriguez
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Two fast-casual restaurants with a competitive stock market presence are Chipotle Mexican Grill (CMG) and Shake Shack (SHAK). They differ almost entirely in their cuisine, and one certainly has an edge over the other in terms of which to invest in. Here’s a glimpse of their performance during the COVID-19 pandemic, followed by how they look in 2024.
Operations
According to Market Beat, in the last few years, Shake Shack showed growth in its share value while managing to open dozens of new locations during the COVID-19 pandemic. It also had a sturdy handle on making do with supply chain disruptions, partially by operating effectively through a digital-friendly infrastructure, offering ease of ordering and app-exclusive menu items.
However, Chipotle had the advantage of more overall establishments and was also able to sustain a digital focus. Ultimately, Chipotle fared better in sales performance and stock value, with a 200% stock increase between spring 2020 and summer 2021, versus Shake Shack’s 45%.
Performance
When it comes to its more recent performance, Shake Shack had a Q1 2024 year-over-year (YOY) increase of 14.7%, to $290.5 million in its total revenue, as reported in its Q1 press release — which was below expectation, though only slightly. For the year, the restaurant predicts a revenue of $1.22 billion to $1.25 billion. It plans to introduce 40 or so new locations this year, which it stated in its Q1 shareholder letter.
On the other hand, Chipotle recently announced a planned 50-for-1 stock split in mid-2024, which caused its stock to increase by 7% to a record high of around $3,000 per share. Its Q1 YOY revenue increased 14.1%, to $2.7 billion, per its release. That said, Chipotle’s current price-to-earnings ratio is 67, which is 14% lower than its five-year average of 78.
All in all, Chipotle investors would need to be set on the long term; conversely, Shake Shack is cautious of market volatility going forward. In the end, Chipotle has continued its trend of outperforming Shake Shack, and your potential return on investment with Chipotle looks higher.
For more investment ideas, check out our article on the best stocks.
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