Chipotle Mexican Grill (CMG 0.99%) is no longer the only player in the fast-casual dining wars. Sweetgreen (SG 1.48%) was founded 14 years after the Tex-Mex chain, but it focuses on salads and bowls for health-conscious consumers.
Between these two restaurant stocks, what's the better long-term play?
Image source: Getty Images.
The winner is clear
I think the king of the fast-casual space, Chipotle, is the better stock to own over the next five years. For starters, the valuation has gotten a lot more attractive, with shares trading at a price-to-earnings ratio of 35.7. And from a fundamental perspective, this business has the brand recognition and scale to support its competitive position.
NYSE: CMG
Key Data Points
Look past the recent struggles
This is despite recent weakness, as same-store sales are expected to fall to low single digits in 2025, according to the management team. That's not as bad as the 8.1% (at the midpoint) drop Sweetgreen is forecasting for its fiscal 2025.
It's troubling to see Sweetgreen struggle to drive meaningful growth. It doesn't help that the company isn't profitable.
Chipotle, on the other hand, is the more proven restaurant concept, with an operating margin of 15.9% in the third quarter (ended Sept. 30, 2025). And it's still opening new locations at a notable pace, which will lead to higher revenue and earnings well into the future.
