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Wingstop (WING) and Cava Group (CAVA) Are Aggressive Growth Stocks
As the aggressive growth stock strategist at Zacks Investment Research Brian Bolan is always hungry for a good idea. This time around he looks at a couple of restaurant stocks in order to satiate he appetite.
Both of these stocks face the challenges of food price inflation and growing labor costs. At the same time, consumers might be “trading down” to these food offerings as opposed to many of the fast-casual restaurants.
Wingstop (WING - Free Report) is a Zacks Rank #1 (Strong Buy) and has more than 2000 locations across the globe. The company has a market capitalization of more than $11B and pays an $0.88 per share dividend for a 0.23% yield. The company is slated to show topline growth of 28% this year and growth that like comes at a price. The forward PE is 110x which is a lot, but as long as that solid growth continues the multiple is mostly justified.
Next up is CAVA Group (CAVA - Free Report) Which is also a Zacks Rank #1 (Strong Buy) and is in the food industry. CAVA is a Mediterranean fast-casual restaurant that also encompasses the Zoes Kitchen brand as well. CAVA sports growth estimates of 24% this year and 20% next year and for that growth investors are paying around 233x forward earnings.
Just as in all of his Aggressive Growth Zacks Rank Buy videos, Brian reviews the earnings history, earnings estimates, growth projections and valuation before taking a look at the chart.