The U.S. food service industry is expected to continue its growth, driven by evolving consumer preferences and increased demand for convenience. As more consumers embrace delivery and takeout options, technology integration in ordering systems, mobile apps, and contactless payments is becoming increasingly important.

Additionally, the rise of ghost kitchens and virtual restaurants is reshaping the traditional dining landscape, providing flexibility and cost-efficiency for operators. The U.S. foodservice market is anticipated to be worth $1.77 trillion by 2030, reflecting a CAGR of 10%. 

Against this backdrop, let’s compare two established Food Makers stocks to analyze which food service stock is poised for growth: J&J Snack Foods Corp. (JJSF) and Cal-Maine Foods, Inc. (CALM).

The Case for J&J Snack Foods Corp. stock

Valued at $2.79 billion by market cap, J&J Snack Foods Corp. (JJSF) manufactures, markets, and distributes nutritional snack food and beverages to the food service and retail supermarket industries in the United States, Mexico, and Canada. It operates through three segments: Food Service, Retail Supermarkets, and Frozen Beverages.

JJSF’s stock has declined 12.6% over the past month but gained 2.1% over the past nine months to close the last trading session at $143.28.

In terms of the trailing-12-month gross profit margin, JJSF’s 30.87% is 14% lower than the 35.90% industry average. However, its 5.50% trailing-12-month net income margin is 30.9% higher than the industry average of 4.20%.

JJSF’s net sales for the fourth quarter that ended September 28, 2024, were reported at $426.76 million. The company’s net earnings and earnings per share came in at $29.64 million and $1.52, respectively.

Street expects JJSF’s revenue for the quarter ended December 2024 to increase 3.6% year-over-year to $360.85 million. The company’s EPS for the same quarter is expected to gain 14.2% year-over-year to $0.59. However, the company failed to surpass consensus revenue estimates in three of the trailing four quarters.

JJSF’s POWR Ratings reflect mixed prospects. It has an overall rating of C, which translates to a Neutral in our proprietary rating system. The POWR Ratings assess stocks by 118 different factors, each with its own weighting.

JJSF is ranked #43 out of 75 stocks in the Food Makers industry. It has a C grade for Growth, Value, Quality, and Sentiment. To see JJSF’s Momentum and Stability ratings, click here.

The Case for Cal-Maine Foods, Inc. Stock

Valued at $5.60 billion by market cap, Cal-Maine Foods, Inc. (CALM) is engaged in the production, grading, packaging, marketing, and distribution of shell eggs and egg products under the brand names of Egg-Land’s Best, Land O’ Lakes, Farmhouse Eggs, Sunups, Sunny Meadow, and 4-Grain.

On October 7, 2024, CALM announced its Board’s approval of $40 million in capital projects to expand its cage-free production capabilities. The funding will come from cash reserves, investment securities, and operating cash flow.

CALM’s stock has gained 22.8% over the past three months to close the last trading session at $114.23.

In terms of the trailing-12-month EBIT margin, CALM’s 24.54% is 156.5% higher than the 9.57% industry average. Likewise, its 27.35% trailing-12-month EBITDA margin is 113.1% higher than the industry average of 12.84%.

In the fiscal second quarter that ended on November 30, 2024, CALM’s net sales increased 82.5% year-over-year and amounted to $954.67 million. The company reported an operating income of $278.06 million, indicating considerable growth from the prior-year quarter, while its gross profit grew 290.7% from the prior-year quarter to $356.04 million.

Its attributable net income came in at $219.06 million and $4.47 per share, up significantly year-over-year, respectively.

Street expects CALM’s revenue for the fiscal third quarter (ending February 2025) to increase 35.7% year-over-year to $953.76 billion. Its EPS for the same period is expected to register a 95.3% growth from the prior year, settling at $5.86. In addition, it surpassed the revenue estimates in three of the trailing four quarters, which is promising.

CALM’s robust fundamentals are reflected in its POWR Ratings. The stock has an overall B rating, translating to a Buy in our proprietary rating system.

CALM has a B grade in Quality and Growth. It is ranked #19 in the same industry.

Click here for the additional POWR Ratings for CALM (Momentum, Stability, Sentiment, and Value).

J&J Snack Foods (JJSF) vs. Cal-Maine Foods (CALM): Which Foodservice Stock Is Poised for Growth?

The U.S. food service industry is poised for growth, driven by increasing demand for convenience, delivery services, and a shift toward healthier, sustainable dining options.

Leading food service companies, such as JJSF and CALM, stand to capitalize on the optimistic industry outlook. However, CALM’s higher profitability and promising near-term outlook favor it as the better stock pick.

Our research shows that the odds of success increase when one invests in stocks with an Overall Rating of Strong Buy or Buy. View all the top-rated stocks in the Food Makers industry here.

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CALM shares were trading at $111.97 per share on Wednesday afternoon, down $2.26 (-1.98%). Year-to-date, CALM has gained 8.79%, versus a 3.60% rise in the benchmark S&P 500 index during the same period.

About the Author: Nidhi Agarwal

Nidhi is passionate about the capital market and wealth management, which led her to pursue a career as an investment analyst. She holds a bachelor's degree in finance and marketing and is pursuing the CFA program. Her fundamental approach to analyzing stocks helps investors identify the best investment opportunities. More...

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