Companies that consistently increase their sales, margins, or returns on capital are usually rewarded with the best returns,
and those that can do all three for years on end are almost always the legendary stocks that return 100 times your money.
A company with profits isn’t always a great investment.
Some struggle to maintain growth, face looming threats, or fail to reinvest wisely, limiting their future potential.
Restaurants are go-to meeting hubs for friends, family, and colleagues. But the side dish is that they’re quite difficult to operate because high inventory and labor costs generally lead to thin margins at the store level.
This leaves little room for error if demand dries up, and it seems like the market has some reservations as the industry has tumbled by 7.2% over the past six months. This drawdown was worse than the S&P 500’s 1.6% fall.
Quarterly earnings results are a good time to check in on a company’s progress, especially compared to its peers in the same sector. Today we are looking at Potbelly (NASDAQ:PBPB) and the best and worst performers in the modern fast food industry.
A company that generates cash isn’t automatically a winner.
Some businesses stockpile cash but fail to reinvest wisely, limiting their ability to expand.
Mediterranean fast-casual restaurant chain CAVA (NYSE:CAVA) missed Wall Street’s revenue expectations in Q1 CY2025, but sales rose 28.1% year on year to $331.8 million. Its GAAP profit of $0.22 per share increased from $0.12 in the same quarter last year.
Markets have recovered lately, but three high-profile names that once saw explosive returns are still down over 50%. Could their day in the sun be on its way?
Expensive stocks often command premium valuations because the market thinks their business models are exceptional.
However, the downside is that high expectations are already baked into their prices, leaving little room for error if they stumble even slightly.
