In this article, we will be taking a look at the 11 Most Promising Restaurant Stocks to Buy According to Hedge Funds.
In 2026, the global restaurant business will be a size, technology, and value-driven market that offers investors both fundamental transformation and robust demand. The global market for foodservice restaurants reached about $2.66 trillion in 2025 and is expected to grow at a 5% CAGR until 2032, when it will reach $3.74 trillion. Rising urbanization, digital ordering, and continuous format innovation in quick-service, full-service, and specialty ideas all promote this.
Internet meal delivery is predicted to increase from about $31.91 billion in 2024 to $74.03 billion by 2033 in the US alone. In this situation, delivery, digital ordering, and off-premise eating remain significant demand channels rather than transient epidemic artifacts.
The primary source of income and a center for innovation is still the United States. Restaurant and foodservice revenues in the United States are expected to hit a new nominal high of $1.5 trillion in 2025, employing 15.9 million people by year’s end and creating around 200,000 net new jobs.
Within that, full-service restaurants were expected to make about $522 billion in 2025, which is somewhat less than limited-service restaurants (QSR/fast service). This shows a continuous mix change toward convenience and value. Due to scale purchasing, digital channels, and loyalty programs, chains are consolidating their market dominance. The top 500 chains generated over $452 billion in 2024, or almost 60% of restaurant sales in the United States, and they continue to exceed small businesses.
Changes in the US restaurant business are allegedly being driven by digitalization and changing consumer behavior. The majority of restaurant traffic now comes from off-premise dining like takeout and delivery, but fast-casual and limited service businesses are expanding due to their quickness, affordability, and convenience. Even though many customers are looking for value options and less priced proteins like chicken, full-service restaurants emphasize ambiance and experiences to justify higher rates.
With that being said, let’s take a look at the most promising stocks.
Our Methodology
We used screeners to identify stocks with an average upside potential of at least 15%, and limited our final selection to companies that have recently reported noteworthy developments likely to impact investor sentiment. These stocks are also popular among analysts and elite hedge funds.
Why are we interested in the stocks that hedge funds pile into? The reason is simple: our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds. Our quarterly newsletter’s strategy selects 14 small-cap and large-cap stocks every quarter and has returned 427.7% since May 2014, beating its benchmark by 264 percentage points (see more details here).
Here is our list of 11 most promising restaurant stocks to buy now.
11. Reborn Coffee, Inc. (NASDAQ:REBN)
Reborn Coffee, Inc. (NASDAQ:REBN) is one of the most promising stocks.
TheFly reported on February 24 that REBN announced a distribution agreement with Sysco Corporation aimed at supporting the company’s expansion of its franchise network across the United States. Through this collaboration, Reborn Coffee, Inc. (NASDAQ:REBN) will utilize Sysco’s extensive logistics network, ordering systems, and service platform to strengthen supply chain efficiency and ensure more reliable product delivery throughout its locations.
The arrangement is designed to simplify procurement processes for franchise stores while improving operational consistency across the brand’s growing footprint. In addition, the partnership will give REBN access to Sysco’s quality control resources, food safety standards, sourcing support, and operational tools, which are expected to enhance store performance and help maintain consistent execution across the company’s system.
On February 12, REBN updated on Reborn Logistics, its wholly owned subsidiary supporting the company’s supply chain and expansion. In Q4 2025, Reborn Logistics posted preliminary revenue of $2.5 million and operating income of $0.6 million. The subsidiary has focused on cost management and process standardization to improve efficiency as volumes grow. Management expects 2026 revenue of about $15 million and operating income of $1.5 million. The logistics platform is central to REBN’s strategy, enabling scalable growth and a more integrated supply chain.
Reborn Coffee, Inc. (NASDAQ:REBN) is a U.S. specialty coffee retailer and franchisor offering high‑quality roasted coffee and café experiences through retail locations, kiosks, and an expanding franchise network. The company focuses on global growth and innovative coffee products.
10. Red Robin Gourmet Burgers, Inc. (NASDAQ:RRGB)
Red Robin Gourmet Burgers, Inc. (NASDAQ:RRGB) is among the most promising restaurant stocks.
TheFly reported on February 25 that RRGB released its earnings call for the twelve weeks and fifty-two weeks ended December 28, 2025. The report states that the company’s full-year revenues were $1,210.2 million compared to $1,248.6 million in 2024, and its overall revenues for Q4 2025 were $269.0 million, down from $285.2 million a year earlier. Revenues from restaurants totaled $1,189.8 million for the year and $263.8 million for the fourth quarter. Comparable restaurant revenue decreased by 3.1% in Q4 and 0.7% overall; decreases were 3.3% and 0.3%, respectively, when deferred loyalty revenue was excluded.
Additionally, Red Robin Gourmet Burgers, Inc. (NASDAQ:RRGB) stated that its operating income was $2.8 million for the entire year, or 0.2% of revenues, and $4.0 million in Q4, or 1.5% of total revenues. With margins of 11.4% and 12.7%, restaurant-level operating profit was $30.2 million in Q4 and $151.5 million for the entire year. In Q4, the net loss was $10.1 million, and in 2025, it was $23.3 million. Adjusted EBITDA improved by 53% over 2024 to $11.8 million in Q4 and $69.7 million for the year.
For 2026, the corporation’s guidance includes comparable restaurant revenue growth of 0.5%–1.5%, restaurant-level operating profit of approximately 13.0%, adjusted EBITDA of $70–73 million, and capital expenditures of $25–30 million.
Red Robin Gourmet Burgers, Inc. (NASDAQ:RRGB) is a U.S. casual dining chain known for gourmet burgers, bottomless steak fries, salads, and brews, operating over 500 restaurants across the United States and Canada.
9. Portillo’s Inc. (NASDAQ:PTLO)
Portillo’s Inc. (NASDAQ:PTLO) stands among the most promising stocks.
TheFly reported that on February 24, PTLO released its financial results for the fourth quarter and the fiscal year ended December 28, 2025. For Q4 2025, total revenue reached $185.7 million, a rise of $1.1 million or 0.6% compared with the same period in 2024, despite a 3.3% decline in same-restaurant sales. Operating income for the quarter was $10.3 million, down $3.5 million, while net income fell $6.2 million to $6.3 million. Restaurant-Level Adjusted EBITDA decreased $4.7 million to $40.6 million, and Adjusted EBITDA declined $0.5 million to $24.7 million.
The corporation highlighted that across fiscal 2025, total revenue amounted to $732.1 million, a $21.5 million increase or 3.0% versus 2024, while same-restaurant sales dropped 0.5%. Operating income for the year was $43.7 million, a decline of $14.4 million, and net income decreased $14.0 million to $21.1 million. Restaurant-Level Adjusted EBITDA totaled $158.4 million, down $9.7 million, and Adjusted EBITDA was $97.3 million, a reduction of $7.4 million.
The business also highlighted in it’s reports that it opened eight new restaurants in 2025 which includes 102 locations system wide, with two additional openings after year end, bringing the total to 104 restaurants.
Portillo’s Inc. (NASDAQ:PTLO) is a U.S. fast‑casual restaurant chain known for Chicago‑style hot dogs, Italian beef, burgers, and shakes, with locations across several states.
8. Black Rock Coffee Bar, Inc. (NASDAQ:BRCB)
Black Rock Coffee Bar, Inc. (NASDAQ:BRCB) is most promising stocks.
TheFly reported on March 3 that BRCB released its financial results for the fourth quarter and full year ended December 31, 2025, reporting strong operational growth and continued business expansion. The company made $53.6 million in total revenue during the quarter, a 25.3% increase from the previous year, and built 12 new outlets. Comparable store sales increased by 9.3% over the same time last year, indicating consistent consumer demand and the company’s expanding brand awareness.
In contrast to a slight operational loss in the same quarter last year, BRCB reported that its operating performance improved as income from operations reached $1.8 million. Additionally, store-level profitability increased dramatically, with margins staying high and store-level earnings hitting $15.7 million. The company’s ability to scale its operating model effectively was demonstrated by the increase in adjusted EBITDA to $6.5 million, which represents a significant improvement over the previous year period.
The company maintained its expansion plan throughout the entire year, adding 32 additional locations and earning $200.3 million in total revenue, which is a 24.5% increase over the prior year. The year’s comparable store sales increased by 10.1%, indicating persistent demand across all areas. In addition to expecting revenue between $255 million and $257 million, the firm anticipates opening 36 more locations by 2026. It also anticipates strong same-store sales performance and a continuous increase in adjusted EBITDA.
Black Rock Coffee Bar, Inc. (NASDAQ:BRCB) operates a U.S. chain of drive-thru coffee shops offering coffee, espresso drinks, teas, and energy beverages. Founded in 2008, the company runs more than 180 company-owned locations across multiple U.S. states.
7. First Watch Restaurant Group, Inc. (NASDAQ:FWRG)
First Watch Restaurant Group, Inc. (NASDAQ:FWRG) is one of the most promising stocks on our list.
TheFly reported on February 25 that BofA Securities reduced its price target for FWRG from $24 to $20 while keeping a Neutral rating on the stock. Due to a weaker increase in same-restaurant sales, the firm lowered its first-quarter and full-year 2026 EBITDA expectations. The firm also said that decreased revenue and adjusted EBITDA are anticipated as a result of lower pricing levels, which led to the revised projection.
First Watch Restaurant Group, Inc. (NASDAQ:FWRG) announced its fourth-quarter and full-year 2025 financial results on February 24. These results covered the 52-week period that ended on December 28, 2025. With same-restaurant sales up 3.6% and overall revenues up 20.3% to $1.2 billion, the company hailed a successful year. Adjusted EBITDA reached $120.9 million, while net income increased marginally to $19.4 million. Revenue for the fourth quarter was $316.4 million, up 20.2% from the same period last year. Net income was $15.2 million, and adjusted EBITDA was $33.7 million.
In 2025, FWRG added 64 new eateries, increasing the number of its system-wide locations to 633 in 32 states. The firm anticipates 59–63 new restaurant openings, 1%–3% rise in same-restaurant sales, a 12%–14% increase in total revenue, adjusted EBITDA of $132 million to $140 million, and capital expenditures of $150 million to $160 million in fiscal 2026.
First Watch Restaurant Group, Inc. (NASDAQ:FWRG) is a U.S.-based daytime dining restaurant chain specializing in breakfast, brunch, and lunch. Known for fresh ingredients, made-to-order dishes, and a health-conscious menu, the company emphasizes quality, value, and a welcoming dining experience across its nationwide locations.
6. BJ’s Restaurant, Inc. (NASDAQ:BJRI)
BJ’s Restaurant, Inc. (NASDAQ:BJRI) is one of the most promising stocks.
On February 25, BJRI reported its financial results for the fiscal fourth quarter and full year ended December 30, 2025. The company stated that while comparable restaurant sales increased by 2.6%, overall revenue in the fourth quarter was $355.4 million, up 3.2% from the same period in 2024. Operating profit at the restaurant level increased by 8.2% to $57.2 million, with margins rising to 16.1%. In contrast to a diluted loss per share of $0.23 in the same period last year, diluted earnings per share came in at $0.58. Adjusted EBITDA jumped 7.4% to $35.6 million, and adjusted diluted EPS went from $0.47 to $0.66. The company paid nearly $5.4 million to repurchase about 167,000 shares during the quarter.
The company’s revenue increased by 3.1% to $1.4 billion for the entire fiscal year 2025, while comparable restaurant sales rose by 2.0%. Operating profit at the restaurant level increased by 10.6% to $216.2 million, while margins increased to 15.5%. Adjusted diluted EPS increased to $2.26 from $1.54 in fiscal 2024, while diluted EPS increased to $2.16 from $0.70. Adjusted EBITDA reached $134.1 million, up 14.5% year over year. The company also repurchased around 2.0 million shares for roughly $67.8 million.
For fiscal 2026, BJRI expects comparable restaurant sales growth of 1% to 3%, restaurant-level operating profit between $221 million and $233 million, and adjusted EBITDA ranging from $140 million to $150 million.
BJ’s Restaurant, Inc. (NASDAQ:BJRI) operates a U.S. casual dining chain known for pizzas, craft beer, and a broad American menu, with over 200 company-owned restaurants nationwide.
5. Papa John’s International, Inc. (NASDAQ:PZZA)
Papa John’s International, Inc. (NASDAQ:PZZA) is among the most promising stocks.
TheFly reported on February 27 that Deutsche Bank adjusted its price target for PZZA down to $35 from $45 while retaining a Hold rating on the stock.
Furthermore, Papa John’s International, Inc. (NASDAQ:PZZA) has confirmed that about 200 stores will close in 2026 as part of its efforts to optimize its restaurant portfolio in North America. The company’s larger plan to increase restaurant-level profitability and operational effectiveness includes these closures. It is anticipated that recent measures, such as cost optimization programs and organizational reorganization, will result in company savings of at least $25 million through 2027, with an estimated $13 million in 2026.
Also, by 2028, the business anticipates that supply chain cost savings of at least $60 million will add about 160 basis points to the profitability of both company-owned and franchise restaurants in North America. PZZA established 279 new restaurants worldwide in 2025, 96 in North America and 183 abroad, and system-wide restaurant sales reached $4.92 billion, up 1% from the year before. Adjusted EBITDA was $201.1 million, and net income for the entire year was $32.1 million. The company hopes to improve profitability, fortify its operating base, and foster long-term sustainable growth in 2026 and beyond by proactively managing closures in conjunction with efficiency initiatives.
Papa John’s International, Inc. (NASDAQ:PZZA) is a global pizza delivery and carryout chain known for quality ingredients, customizable pizzas, and digital ordering, operating thousands of locations worldwide.
4. Cannae Holdings, Inc. (NYSE:CNNE)
Cannae Holdings, Inc. (NYSE:CNNE) is among the most promising stocks.
TheFly reported on February 24 that RBC Capital kept an Outperform rating on CNNE while reducing its price target from $19 to $16 following the company’s fourth-quarter results. The firm noted that management is accelerating a shift in the company’s portfolio toward sports and entertainment assets, although near-term share repurchases are expected to provide less support as a positive catalyst.
The company released its Q4 2025 and full-year 2025 reports on February 23. Financially, Q4 2025 revenue totaled $103 million, down 6% from $110 million in 2024, driven by lower restaurant traffic and nine fewer O’Charley’s locations, partially offset by higher average guest checks and stronger resort revenues. Operating expenses were $127 million, including $12 million in non-cash impairments; excluding these, expenses fell 13%. Net recognized losses decreased $8 million, while equity losses from unconsolidated holdings totaled $69 million, mostly from Alight.
For the full year, CNNE said its revenue declined to $424 million from $453 million, and its operating loss rose to $119 million from $104 million, reflecting non-recurring charges and impairments. Excluding these items, operating expenses dropped approximately 27%. Year-end assets totaled over $1.3 billion against $330 million in liabilities, with $147 million in cash and only $48 million in corporate debt.
Cannae Holdings, Inc. (NYSE:CNNE) is a U.S. diversified holding company that makes strategic investments and actively manages a portfolio of operating businesses to create long‑term shareholder value.
3. Sweetgreen, Inc. (NYSE:SG)
Sweetgreen, Inc. (NYSE:SG) is one of the most promising stocks.
TheFly reported on February 27 that RBC Capital kept an Outperform rating on SG but reduced its price target from $8.00 to $7.00. The company’s same-store sales forecast for fiscal year 2026, which is expected to drop between 2% and 4%, is 320 basis points below analyst consensus, according to the firm, which indicates persistent difficulties in reaching customers. As Sweetgreen strives to increase traction in the present market climate and expand its value offer, RBC noted that this view indicates management expects a considerable acceleration in performance later in the year.
On February 26, Sweetgreen, Inc. (NYSE:SG) announced its financial results for the fourth quarter and the entire year of 2025. Due to fewer traffic and a switch from the previous Sweetpass+ program to SG Rewards, same-store sales decreased by 11.5% in the fourth quarter, resulting in a 3.5% drop in overall revenue to $155.2 million as compared to the same period in 2024. Owned digital channels reached 38.0% of overall revenue, while digital sales increased to 65.1%. Restaurant-level profit was $16.2 million, while operating loss was $48.1 million. Adjusted EBITDA was negative by $13.3 million, while net loss was $49.7 million. The company reported a modest increase in revenue to $679.5 million for the entire year, along with net losses of $134.1 million and a negative $11.0 million adjusted EBITDA.
Sweetgreen, Inc. (NYSE:SG) is a U.S. fast‑casual restaurant chain offering made‑to‑order salads and bowls using fresh, seasonal ingredients, focused on healthy, sustainable food.
2. Domino’s Pizza, Inc. (NASDAQ:DPZ)
Domino’s Pizza, Inc. (NASDAQ:DPZ) is one of the most promising restaurant stocks.
TheFly reported on February 25 that Guggenheim lowered its price target for DPZ to $440 from $450 while keeping a Neutral rating on the shares. The firm revised its valuation strategy to a 2027 basis, raised its 2027 EPS estimate to $20.85, and maintained its 2026 EPS forecast at $19.60 in response to the fourth-quarter results.
Earlier on February 23, Domino’s Pizza, Inc. (NASDAQ:DPZ) released its financial results for the fourth quarter and full fiscal year 2025. During the fourth quarter, global retail sales rose 4.9%, excluding currency effects, while U.S. same-store sales advanced 3.7%. International comparable sales increased 0.7% over the same period. The company also recorded global net store growth of 392 locations during the quarter. Operating income climbed 8.0% year over year, reflecting improved operational performance.
For the full fiscal year 2025, global retail sales increased 5.4%, while U.S. same-store sales grew 3.0% and international comparable sales expanded 1.9%. Domino’s added a net 776 stores worldwide during the year. Operating income for the full year rose 8.5%, highlighting steady financial momentum. In addition, the company’s Board of Directors approved a 15% increase in its quarterly dividend, raising the payout to $1.99 per share.
Domino’s Pizza, Inc. (NASDAQ:DPZ) is a global pizza delivery and carryout company with thousands of restaurants worldwide, known for fast service, online ordering, and a wide range of pizzas and sides.
1. Dutch Bros Inc. (NYSE:BROS)
Dutch Bros Inc. (NYSE:BROS) tops our list of the most promising stocks.
TheFly reported on March 2 that Goldman Sachs raised its rating on BROS from Neutral to Buy and kept its price target at $75. The firm said it sees stronger underlying business performance than the market currently recognizes and believes the recent decline in the stock price creates a compelling opportunity to invest in a company with one of the most attractive growth profiles in the U.S. restaurant sector.
Earlier on February 12, Dutch Bros Inc. (NYSE:BROS) announced its fourth quarter and full year report. The company expanded throughout 17 states in the fourth quarter by opening 55 new stores, including 52 company-operated sites. Compared to $342.8 million in the same quarter of 2024, total revenue climbed 29.4% year over year to $443.6 million. While transactions increased by 5.4%, system-wide same-shop sales jumped by 7.7%.
The report also shows that the Company-operated same-shop sales climbed 9.7%, with transactions up 7.6%. While adjusted EBITDA increased 48.8% to $72.6 million, net income increased to $29.2 million from $6.4 million in the previous year. Revenue climbed to $1.64 billion from $1.28 billion, and net income to $117.3 million from $66.5 million for the entire year.
The company anticipates at least 181 new store openings, adjusted EBITDA of $355 million to $365 million, same-shop sales growth of 3% to 5%, revenue of $2.0 billion to $2.03 billion, and capital expenditures of $270 million to $290 million in 2026.
Dutch Bros Inc. (NYSE:BROS) is a U.S. drive‑through coffee chain serving coffee, energy drinks, and other beverages through company‑operated and franchised locations nationwide.
While we acknowledge the potential of BROS to grow, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns and have limited downside risk. If you are looking for an AI stock that is more promising than BROS and that has 100x upside potential, check out our report about this cheapest AI stock.
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