Fast-casual's bowl brigade is tasting something new this season: a healthy serving of valuation discipline. Once priced like tech disruptors, Chipotle Mexican Grill Inc (NYSE:CMG), CAVA Group Inc (NYSE:CAVA) and Sweetgreen Inc (NYSE:SG) are now navigating a sharp reset as investors reassess growth expectations and future profitability.
- Track CMG stock here.
Chipotle's Premium Cool-Down
Chipotle, the sector's heavyweight, has shed more than 35% year-to-date and now trades near a 52-week low of $38.30, a far cry from its $66.74 high. At roughly 35X forward earnings, Chipotle still commands a premium to traditional restaurant peers. But it's down more than half from its historical 10-year multiple, showing that even stalwart growth stories aren't immune to the market's stricter lens.
For long-term investors, that multiple compression might signal opportunity, but the easy-money growth era is over.
Read Also: Bill Ackman’s Chipotle Bet Still Sizzles Despite 52-Week Low
Cava's Hot IPO Turns Tepid
Cava was 2024's fast-casual darling, surging after its IPO and trading at lofty triple-digit P/E ratios. Now, the stock has slid to around its 52-week low, with a valuation closer to 56X earnings – more a "reset" rather than a "collapse."
That's still pricey, but the sharp comedown suggests sentiment has cooled, reflecting concerns over slowing traffic growth and the challenges of sustaining premium pricing in a competitive market.
Sweetgreen's Future Remains A Promise
Sweetgreen, still unprofitable, continues to be valued on price-to-sales rather than earnings. Investors are betting on scale and profitability, but the market is signaling less patience for growth-at-all-costs. Its stock trajectory underscores that sentiment: the "pay now for future margins" playbook is losing steam in this tighter capital environment.
The collective slump marks a stark shift from the days when these names were treated like high-growth tech startups. If anything, the current reset reflects a new market appetite for value over hype, even in beloved consumer-facing brands.
Read Next:
Photo: Shutterstock
