3 Fast Food Stocks That Won’t Give You Indigestion Right Now

Key Points

• Fast food chains are struggling in 2025, with major players like Krispy Kreme, Wendy’s, and Chipotle posting significant year-to-date losses.
• Rising prices and economic pressures have made fast food feel like a luxury for many Americans, forcing brands to rethink traditional strategies.
• On the upside, three fast food stocks are poised to outperform in the second half of 2025: McDonald's, Shake Shack, and Wingstop.
  

Americans are no longer bellying-up to the counter at fast food establishments, and that’s giving industry executives indigestion.

Exhibit “A” is fast food stocks that are tapering off. Here’s a sample size of the worst performers and their lackluster performance so far this year.

• Krispy Kreme NASDAQ: DNUT: This pastry purveyor is 2025’s worst performer, with DNUT shares plummeting over 68% year-to-date (YTD) after losing its McDonald’s distribution deal and experiencing significant sales declines.
• Cava Group NYSE: CAVA: This high-end quick-serve eatery was off 37% earlier in the year but has gained some share growth back. It is now sitting at around negative 21% YTD after getting slammed by a combo platter of rising valuation concerns and sluggish store traffic.
• Chipotle NYSE: CMG: Chipotle Mexican Grill shares are down over 9% YTD primarily due to weaker sales and sliding profit growth.
• Wendy’s NASDAQ: WEN: This burger chain slipped over 33% YTD, reflecting ongoing same‑store sales weakness despite promotional efforts like the “$5 Biggie Bag.”

Why the trouble for quick-stop food chains?

One big reason (and there are multiple ones) is that chain sales haven’t kept pace with economic growth, which is never a good sign for an industry that tries to keep menus stable and straightforward.

According to Technomic’s Top 500 study, U.S. fast food chain sales rose by only 3.1% last year, significantly less than the 4.01% menu-price inflation rate. It’s also behind the U.S. food-at-home sales, which grew by 1.2%. So far, this year hasn’t delivered anything better, with gross domestic product (GDP) sliding by negative 0.5% in the first quarter of 2025, although GDP did grow to 2.9% in the second quarter of 2025.

That’s led to a Q1 sales decline of 3% for KFC, Pizza Hut, and Taco Bell parent company Yum! Brands NYSE: YUM. Additionally, in the first three months of 2025, Chipotle issued its worst quarterly numbers since the pandemic.

Maybe that’s why 78% of US consumers view fast food as a “luxury." About 50% of Americans say they view fast food as a budget buster due to lower household savings.That’s no ideal scenario for the sector, which should take a page out of some up-and-coming quick-service chains to regain lost ground.

“Restaurants can’t simply rely on their traditional playbooks anymore,” says Forrest Morgeson, Associate Professor of Marketing at Michigan State University and ACSI Director of Research Emeritus, in a recently released ACSI Restaurant and Food Delivery study.  

“Smaller, popular brands like Raising Cane’s and Wingstop are proving that creative marketing, digital engagement, and focusing on core strengths can challenge even the most established chains. The brands that succeed will be the ones that adapt quickly to shifting tastes without compromising consistency or experience.”

Still, with the U.S. economy moderately improving in Q2 and even with many quick-serve eateries facing an uphill climb, there are opportunities to invest in specific sector names with the capacity to withstand the current challenges and prosper in the long term.

Here are three fast-food companies for investors to snack on right now.

McDonald's: Value Deals Support a Share Increase

McDonald's NYSE: MCD is trading around $300 per share, with Goldman Sachs citing a $345 target price for the Golden Arches, primarily due to new value deals like the chain’s snack wraps and double burgers, both recently reintroduced to the McDonald’s menu.

Despite reporting its weakest quarter since the pandemic, the chain is showing signs of recovery as digital promotions and global value meals help drive traffic. McDonald’s global scale and marketing muscle continue to give it an edge in a tough macro climate. The brand is betting big on operational efficiency, AI-powered kitchens, and digital expansion to keep sales strong and margins healthy in the quarters ahead.

At 2.35%, MCD also offers income-minded investors a decent dividend yield, with an 8.4% five-year annualized dividend growth rate. Institutional investors remain bullish, with firms like Vanguard and BlackRock modestly increasing their holdings in early 2025.

Shake Shack: In Full Expansion Mode

Shake Shack NYSE: SHAK is on a big run, gaining 69.3% over the past three months, after reporting $320.9 million for its most recent quarter, up 10.5% on a year-to-year basis.

SHAK could be a good momentum play, given its upbeat earnings (the company’s Q2 earnings report is due out on July 31) and the fact that it has significantly outperformed its sector benchmarks and the S&P 500 over the past quarter.

Company executives are confident in SHAK’s financials, expanding both its digital services menu options and licensing operation, with the company set to open 50 new stores in 2025.

Fund managers are on board, with Charles Schwab Investment Management snapping up 8,400 shares in Q1, adding 2.4% to its SHAK position. Capital Shares added a new position in the stock, valued at $5.1 million. Amundi, Proficio Capital Partners, and Zurcher Kantonalbank Zurich Cantonalbank also added the stock in recent months.

Additionally, earnings estimates for this year and next are up 1.5% and 4.2%, year-over-year, giving investors reason to believe the New York-based former hot dog stand is poised for more growth through 2025.

Wingstop: On a Two-Decade Tear, Growth-Wise

Chicken wing chain Wingstop NASDAQ: WING has seen its share price rise by 10% YTD and by nearly 40% over the past three months. 

Stability is the key with the stock, as WING owns 2,000 locations globally and has reported 21 straight years of same-store sales growth. The company’s backbone is its franchisee stable, with 97% of the chain’s eateries being franchise-owned and operated.

Wingstop relies heavily on technology to run its stores, particularly with its new Smart Kitchen system, which was unveiled in May. This system features approximately 100 data points used to track customer demand in 10- to 15-minute timeframes, thereby reducing wait times and ensuring a maximum 10-minute wait time for meals.

Analysts cite the company’s robust brand momentum, strong history of revenue growth, and savvy digital presence that keeps customers coming back for more. They have given WING stock a Moderate Buy rating with a $358 target price.