It's been a wild ride for shareholders of Cava Group (CAVA 0.25%). The stock soared in the first month-and-a-half after its initial public offering (IPO). But as of this writing, it's down 44% from the peak price as investor optimism starts waning. 

Nonetheless, it's easy to see why there was so much excitement about the up-and-coming, Mediterranean-focused fast-casual chain. The growth potential is certainly there. 

But if you're one of those investors who are considering buying shares of Cava right now, you might be more interested in Chipotle Mexican Grill (CMG 0.28%). Let's take a closer look at these two popular restaurant stocks. 

Cava is intriguing 

Investors were drawn to Cava right at its IPO. Shares were up 160% between the opening price and its all-time high. The stock was supported by a generally favorable market backdrop, as both the S&P 500 and the Nasdaq Composite were up during the same time. 

Cava sparked renewed interest in the IPO market, primarily because of its remarkable growth. In the most recent fiscal period (second-quarter 2023, ended July 9), revenue increased 62% year over year to $171 million. Same-store sales were up an impressive 18%. And the business was able to post positive net income of $6.5 million, versus a loss of $8.2 million in Q2 2022. 

Additionally, there were 16 new Cava restaurants opened in the quarter, bringing the total to 279 today. Key to the company's growth strategy, and likely the main factor that investors are attracted to, is that management sees the business having 1,000 locations open by 2032. That translates to roughly 300% expansion over the next nine years. 

Benefiting from the rapid rise of fast-casual dining concepts, as well as heightened consumer interest in health and wellness, Cava is in a prime position to continue growing at a brisk pace in the years ahead. Wall Street appears bullish, too, with estimates calling for revenue to double between fiscal 2023 and 2027. 

Despite the positive attributes, one of the reasons I am hesitant to scoop up shares of Cava is because I don't believe the business possesses a sufficient economic moat, or some qualities that can help defend it against intense competition in the restaurant sector. In this industry, the presence of a strong brand or scale advantages can be key drivers of success.

Cava's growth is impressive, but it's still tiny in the grand scheme of things, so I think it lacks these traits. That's why I'm OK with passing up on the stock right now. 

Chipotle is dominant 

Chipotle stands out where Cava falls behind. With 3,268 stores in the U.S., it has become synonymous with the fast-casual boom. Newer restaurant concepts that follow the same in-store experience are often referred to as the "Chipotle of [fill in a cuisine]." This has resulted in a well-known brand. 

Its reputation took a major hit after the E. coli outbreak in 2015. But seeing as how the restaurant chain has come roaring back in the past several years, it's safe to say the business easily overcame that test, a clear indication of its standing with consumers. 

And the company's successful rewards program, which has 35 million members, demonstrates management's focus on driving greater convenience and accessibility for customers. An ongoing digital push, and the introduction of drive-thru Chipotlane locations, have bolstered the company's industry position. 

The numbers clearly back up Chipotle's remarkable success. Second-quarter revenue of $2.5 billion was 79% higher than in the same period four years ago in 2019, prior to the pandemic. In 2022, Chipotle posted a stellar operating margin of over 13%, an outstanding level of profitability that Cava executives can only dream of right now. And through the first six months of this year, diluted earnings per share soared 54% year over year, thanks in part to the company's ability to consistently raise menu prices. 

Chipotle shares have crushed the market, up almost fourfold in the past five years. This has resulted in a stock that isn't necessarily cheap, trading at a trailing price-to-earnings ratio of 46. However, the shares are down 14% from their all-time high set in July of this year. Investors looking to buy a dominant company in the restaurant industry can add Chipotle, a proven winner, to their portfolios at a notable discount.