Chipotle Mexican Grill (NYSE: CMG) and Sweetgreen (NYSE: SG) are competing in the fast-casual dining sector. Sweetgreen, founded 14 years after Chipotle, targets health-conscious consumers with salads and bowls.
Between these two restaurant stocks, which is the better long-term investment? The answer appears to favor Chipotle.
Chipotle's shares currently trade at a price-to-earnings ratio of 35.7, making its valuation more attractive. The company has strong brand recognition and scale, supporting its competitive position.
Recent weakness has been noted, with same-store sales expected to fall to low single digits in 2025, according to management. This compares to Sweetgreen's forecast of an 8.1% drop at the midpoint for its fiscal 2025.
Sweetgreen's struggles to drive meaningful growth are concerning, compounded by its lack of profitability. In contrast, Chipotle reported an operating margin of 15.9% in the third quarter ended September 30, 2025.
Chipotle continues to open new locations at a notable pace, which is expected to boost future revenue and earnings.
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