Two restaurant stocks attract investors after market declines

Investing in fast-growing companies can help you build wealth over time. Current market volatility may give investors a chance to buy shares at better prices. Two emerging restaurant brands that are expanding in the U.S. are worth considering. Dutch Bros is a popular drive-thru beverage chain. As of the end of 2024, it had 982 locations in 18 states. The stock recently fell 24% from its highs, providing a good buying opportunity. The company promotes a strong culture by developing managers from within, which helps maintain service quality. Despite a challenging consumer spending environment, Dutch Bros saw an increase in sales, growing 2.8% in 2023 and 5.3% in 2024. Last quarter, its total revenue grew 35% year-over-year after opening 32 new shops. The stock price-to-sales ratio is about 5.3, which seems reasonable given its growth and many untapped markets. Cava Group is another strong growth stock worth considering. Its shares dropped 53% from their 52-week high. Cava specializes in Mediterranean fast-casual dining and has seen impressive profit margins of 13%. The restaurant uses technology to improve efficiency, which boosts profitability. In 2024, Cava’s net profit surged from $13.3 million to $50.2 million. The company aims to expand to 1,000 locations by 2032, with plans to open restaurants in south Florida and other regions. The stock trades at a price-to-sales ratio of about 10.5, which is high for a restaurant but may be justified by its growth prospects. Both Dutch Bros and Cava represent potential opportunities for investors looking to capitalize on their future success. Nevertheless, it might be smart to invest gradually in these companies as they continue to expand.