Shares of Fancy Fast Food Rises in U.S.
Published By : 05 May 2015 | Published By : QYRESEARCH
Almost 6 food chains have accounted for the steaming stock market entrants in the previous year to meet a increasing appetite for the fast-casual restaurants catering to the younger and prosperous diners, who are willing to pay more for the food that are higher in quality and in freshness than they expect to find at conventional fast food joints such as McDonald's.
Wall Street expects the new crop of the publicly traded restaurants to replicate the achievement of Chipotle Mexican Grill, which has rose to around 1,800 restaurants since its inception in 2006. With customers’ spending showcasing signs of enhancement and more diners eager on meats free from anti-biotics and various other healthy foods, it is a great time for eateries in that niche, specifically ones those are skilled at constructing grass-roots buzz and the loyalty, state experts.
But investors have triggered the shares of some of those restaurants such as Zoe's Kitchen Inc., Shake Shack Inc., and Habit Restaurants Inc. to soaring heights that entail growth expectations, which may be proved hard for the management to offer.
The big outperformer, Shake Shack, is up around 26% since it coming into public trading at the end of January, 2015. As a group, the shares of the established restaurant enterprises have done better than the wider stock market exponentially, with the U.S. Restaurants & Bars Index at Dow Jones, excluding the newcomers, rising around 11% in the first half of 2015, comparing to the 2% increase of Standard & Poor.
On the basis of the number of locations opened at the end of 2014, Shake Shack's existing stock price evaluates its restaurants at US$40 million each, which are almost 4 times of a Chipotle restaurant’s market value and 15 times of the value investors have assigned to a restaurant of McDonald's corporation.