Fast casual stocks were smoked in 2025, but thinks I've started to look up in the new year.

We're digging into whether or not this is a real turnaround for food today on Motley Full Money.

Today is Tuesday, January 20th. Welcome to Motley Full Money. I'm your host, Emily Flippin, and today

I'm joined by full analysts, Sendmiteo, and Jason Hall to discuss the rebound in fast casual

stocks, what's been driving it, and what consumer trade-down behavior means for the category in the

year ahead. Now, it's no surprise, but 2025 was a rough year for fast casual stocks.

Wingstop, Chipotle, Kava, and Sweet Green, all lost double-digit amounts of value in the year,

15, 37, 47, and 78% of their value respectively.

Now, obviously, that's a combination of concerns around valuation,

trade downs for budget conscious shoppers, inflation, changing consumer behaviors, just name it,

it's probably a result. But it does seem like something fundamentally did shift over the course

of the past year. And Sunmeet, I want to start with you and what's been driving the weakness

and fast casual. What do you think investors

have gotten wrong over the past years that caused such a contraction valuation?

Yeah, you know, so fast casual valuations have become almost SaaS-like, you know, they were

stretched beyond belief. You know, I think what investors underestimate is the value gap between

fast casual and casual dining.

Traditionally, fast casual was seen as better for you food at a slightly premium price, and

consumers are willing to pay this price because the food felt, you know, healthier,

fresher. Over the past year, I believe these fast casual companies, they just got a little

too aggressive with pricing and took it too far. You know, we saw menu price inflation, fast casual outpaced the broader industry.

You know, when a bowl at Kava or a salad at sweet green pushes past $16 or $18 after delivery fees and tips,

...