Within the fast-food game, we often think of names like McDonald's. But chains that are not burger-centric have been making the most noise recently.

In particular, I'm talking about Cava Group (CAVA -1.82%) and Chipotle Mexican Grill (CMG -1.12%). Cava is a Mediterranean chain and a relatively young buck, while Chipotle is more established. Both offer compelling investment opportunities in their own right, but which is the better choice right now?

Recent results

In the third quarter, Cava handily outpaced Chipotle in a few key areas. The Mediterranean restaurant chain reported revenue growth of 39% year over year, compared to Chipotle's 13%. Cava also won with same-restaurant sales growth (comps) of 18.1% compared to Chipotle's comps of 6%.

It is worth noting that Cava's comps growth benefited from a 12.9% increase in guest traffic, and an increase in menu pricing. Cava reported growth in diluted earnings per share (EPS) of 150%, to $0.15; Chipotle had earnings growth of 21.7% per diluted share to $0.28. 

Of course, you can't base your investments solely on a single quarter. On a broader basis, Cava earnings are up 83.3% so far this year to $0.44 per diluted share, while Chipotle's are up 27.9% to $0.87 per diluted share. Chipotle's sales were up 15.13% through the first three quarters of the year, while Cava's revenue was up 33.5% to $736.3 million.

When looking at sheer growth, this has been Cava's year thus far. The company is leading on revenue and earnings and seems to have the momentum. Because it's a smaller company, its percentage gains have the added bonus of looking better when there is exceptional growth, but at over $728 million in revenue last year, coupled with the gains thus far in 2024, the gap is closing fast.

Comparisons and calculations

Since I last wrote about Cava, the stock has gained 30% from the end of August until now. In comparison, Chipotle's shares have gained 5.69%.

Looking to the future, analyst estimates are calling for Cava to have full 2024 EPS of $0.50. Given that the company has been beating estimates, I think this forecast is pretty safe.

The company's own updated guidance also gives reason to think that earnings growth should continue to meet estimates at the bare minimum. In its most recent quarter, management revised its full-year comps growth estimates from a range of 8.5% to 9.5%, to a range of 12% to 13%.

I think that upside creates the opportunity for Cava to turn in another banner result in the fourth quarter and speaks to the chain's prospects as a whole. If it reaches analysts' average full-year EPS estimate of $0.50, that would give the stock a forward P/E of 284 times full-year earnings.

Chipotle's most recent results included full-year guidance for comps to rise by the mid to high single digits. That trails Cava's guidance slightly, but it is still strong. Analyst estimates are calling for full-year EPS of $1.07, which would give the Mexican chain a forward P/E of 54 times earnings. It's pretty clear that Chipotle wins the valuation battle based on current near-term expectations.

What's the buy?

So how do you take this info and compare these two companies? Overall, Cava is a much younger business, having been founded in 2006, compared to Chipotle, which has been around since 1993. Both companies have healthy balance sheets with plenty of cash on hand, but Chipotle has had healthier cash flow over the last few years.

Overall, I think this comes down to what you're looking for. Chipotle is a more mature business with a proven track record, and a much lower premium on shares relative to earnings. But it isn't exhibiting the same growth rates as Cava.

I think the younger company, with its similar business structure but a focus on Mediterranean food (along with its recent addition of steak), stands to deliver better returns over the coming years. Yes, it is a more expensive stock from an earnings perspective, but it is exhibiting higher growth rates for revenue and earnings.

To be clear, I don't think Chipotle is a bad stock at all; I just see Cava exhibiting much more momentum. Since 2023, investors are clearly happy with the restaurant chain's shift to profitability, coupled with its revenue growth. And earnings surprises seem to be rewarded with a strong stock performance.

My one and only caution is that it might be best to see if Cava shares can pull back a bit before buying in. Again, they are conservatively trading at 284 times forward full-year earnings. It's not a cheap stock.