The global food service industry is witnessing steady growth, driven by rising health-consciousness, technological advancements, and the increasing popularity of online food delivery platforms.

This expansion is creating opportunities for key players like Biglari Holdings Inc. (BH - Get Rating), Nathan’s Famous, Inc. (NATH - Get Rating), and El Pollo Loco Holdings, Inc. (LOCO - Get Rating), which are leveraging industry trends to stay competitive and cater to evolving consumer demands.

Automation technologies are transforming the restaurant industry by improving efficiency, streamlining operations with robotics, and utilizing AI for inventory management and personalized customer experiences, helping businesses meet evolving consumer demands.

In addition, the rise of themed restaurants and pop-up food events, coupled with the increasing reliance on online food delivery platforms, is further propelling market growth by enhancing convenience and offering unique dining experiences. Therefore, the global food service industry is valued at $3.09 trillion in 2024, and is projected to grow to $4.14 trillion by 2033, at a CAGR of 3.2%.

Considering these positive trends, let’s explore Restaurants stocks further:

Stock #3: El Pollo Loco Holdings, Inc. (LOCO - Get Rating)

LOCO specializes in offering Mexican-inspired quick-service meals, including fire-grilled chicken, burritos, tacos, and salads. These products cater to diverse end users, including families, individuals, and fast-food enthusiasts in the United States and the Philippines.

On October 29, LOCO introduced its new Iconic restaurant prototype, featuring a modern, efficient design aimed at enhancing customer experience and menu innovation. This move is expected to strengthen the brand’s market position, attract a broader customer base, and drive revenue growth through a refreshed dining experience.

In the fiscal third quarter ended September 25, 2024, LOCO’s total revenue was $120.40 million. Its income from operations was $10.14 million. In addition, the company’s adjusted net income stood at $ 6.29 million and adjusted EPS stood at $ 0.21, up 10.5% over the prior-year quarter.

Street expects LOCO’s revenue and EPS for the year ending December 31, 2024, to increase marginally and 16.6% year-over-year to $ 471.95 million and $0.83, respectively. It surpassed the consensus EPS and revenue estimates in three of the trailing four quarters.

Over the past year, the stock has gained 42.2% to close the last trading session at $12.41. It soared 40.7% year-to-date.

LOCO’s POWR Ratings reflect its robust outlook. The stock has an overall rating of B, equating to a Buy in our proprietary rating system. The POWR Ratings are calculated by considering 118 distinct factors, with each factor weighted to an optimal degree.

LOCO has a B grade in Value. It is ranked #3 out of 40 stocks in the Restaurants industry.

Beyond what we have stated above, we also have given LOCO grades for Growth, Momentum, Stability, Sentiment, and Quality. Get all the LOCO’s ratings here.

Stock #2: Biglari Holdings Inc. (BH - Get Rating)

BH operates a diverse portfolio of businesses, including restaurants under the Steak n Shake and Western Sizzlin brands, commercial trucking insurance, and oil and gas properties. It also engages in media through MAXIM magazine and investment activities, catering to industries like food, insurance, energy, and entertainment.

In the fiscal third quarter ended September 30, 2024, BH’s total revenues was $90.41 million. Its earnings before income taxes were $43.33 million, compared to a loss of $74.02 million in the prior year quarter. In addition, the company’s net earnings and net earnings per average equivalent Class A share stood at $32.13 million and $114.77, compared to a loss of $ 56.51 million and $ 195.55 in the prior year quarter, respectively.

Shares of BH have gained 51.3% over the past year and is up 55.6% year-to-date to close the last trading session at $256.69.

BH’s POWR Ratings reflect its robust outlook. The stock has an overall rating of A, equating to a Strong Buy in our proprietary rating system.

BH has a B grade in Stability, Sentiment, and Quality. It is ranked #2 in the same industry.

To access BH’s Growth, Value, and Momentum ratings, click here.

Stock #1: Nathan’s Famous, Inc. (NATH - Get Rating)

NATH operates and franchises restaurants, sells branded hot dogs, sausages, snacks, and condiments through retail and foodservice channels, and licenses its products for manufacturing and distribution. It also offers items like fish fillets and hors d’oeuvres under its brand.

On December 6, NATH declared a quarterly cash dividend of $0.50 per share. It pays an annual dividend of $2, which translates to a dividend yield of 2.30% at the prevailing price levels.

NATH’s total revenues increased 6.1% year-over-year to $ 4.11 million in the fiscal second quarter of 2025, which ended on September 29, 2024. Its income from operations came in at $ 963.20 thousand, up 5.8% year-over-year. In addition, the company’s net income reached $603 thousand, up 5.6% from the same quarter last year, and EPS was $1.47, indicating an increase of 5% from the prior-year quarter.

Shares of NATH have gained 18.4% over the past year and are up 9.5% year-to-date to close the last trading session at $85.42.

NATH’s POWR Ratings reflect its robust outlook. The stock has an overall rating of A, equating to a Strong Buy in our proprietary rating system.

It has an A grade for Quality and a B in Sentiment. It tops the same industry.

Click here to see NATH’s ratings for Growth, Value, Momentum, and Stability.

What To Do Next?

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BH shares fell $2.54 (-0.99%) in premarket trading Wednesday. Year-to-date, BH has gained 54.10%, versus a 28.36% rise in the benchmark S&P 500 index during the same period.

About the Author: Kritika Sarmah

Her interest in risky instruments and passion for writing made Kritika an analyst and financial journalist. She earned her bachelor's degree in commerce and is currently pursuing the CFA program. With her fundamental approach, she aims to help investors identify untapped investment opportunities. More...

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