Diveroli Investment Group Files Schedule 13D, Endorses Strategic Turnaround Path for Noodles & Company

What Happened?

Shares of sushi restaurant chain Kura Sushi jumped 5.5% in the afternoon session after news that an activist investor took a stake in peer restaurant chain Noodles & Company sparked broader interest in the sector. Galloway Capital Partners acquired a 6% stake in Noodles & Company, a move that often suggests an investor sees potential for improvement or considers the company undervalued. This development occurred as many restaurant chains faced difficulties, including shifts in customer spending and tough economic conditions. The positive reaction in the sector indicated that investors might be looking for similar opportunities in other restaurant stocks, potentially viewing them as undervalued as well.

After the initial pop the shares cooled down to $52.46, up 4.6% from previous close.

Is now the time to buy Kura Sushi? Access our full analysis report here.

What Is The Market Telling Us

Kura Sushi’s shares are extremely volatile and have had 46 moves greater than 5% over the last year. In that context, today’s move indicates the market considers this news meaningful but not something that would fundamentally change its perception of the business.

The previous big move we wrote about was 26 days ago when the stock dropped 13.6% on the news that its third-quarter 2025 earnings report revealed a weak outlook that sparked concern among investors. While the conveyor-belt sushi chain surpassed Wall Street's expectations for both quarterly revenue and earnings per share, the positive results were overshadowed by forward-looking weakness. The company's full-year revenue guidance of $332 million came in below analysts' forecasts. Additionally, Kura Sushi reported that its same-store sales were flat year-over-year, indicating a stall in growth from its existing restaurants. This combination of a disappointing revenue forecast and stagnant performance at established locations signaled potential challenges ahead, causing investors to sell off the stock despite the headline earnings beat.

Kura Sushi is down 45.2% since the beginning of the year, and at $52.46 per share, it is trading 50.9% below its 52-week high of $106.76 from December 2024. Investors who bought $1,000 worth of Kura Sushi’s shares 5 years ago would now be looking at an investment worth $2,919.

Check out the companies making headlines yesterday:

DoorDash : On-demand food delivery service DoorDash (NYSE:DASH)rose by 4.3% on Monday after a director at the company and partner at a major investor, Sequoia Capital, purchased approximately $100 million worth of its shares. See our full article here.

Is now the time to buy DoorDash? Access our full analysis report here.

Chegg : Online study and academic help platform Chegg fell by 8.7% on Monday after the Federal Trade Commission (FTC) took action against peer company Illuminate Education, Inc. over a major data breach. See our full article here.

Is now the time to buy Chegg? Access our full analysis report here.

Red Robin : Burger restaurant chain Red Robin fell by 1.8% on Monday after the company announced the appointment of Christopher Meyer as its interim Chief Financial Officer. See our full article here.

Is now the time to buy Red Robin? Access our full analysis report here.

DraftKings : Fantasy sports and betting company DraftKings rose by 3.1% on Monday after the company received mixed reviews from analysts, with one firm reiterating a "Buy" rating while another cut its price target. See our full article here.

Is now the time to buy DraftKings? Access our full analysis report here.

The end of the earnings season is always a good time to take a step back and see who shined (and who not so much). Let’s take a look at how modern fast food stocks fared in Q3, starting with Noodles .

Modern fast food is a relatively newer category representing a middle ground between traditional fast food and sit-down restaurants. These establishments feature an expanded menu selection priced above traditional fast food options, often incorporating fresher and cleaner ingredients to serve customers prioritizing quality. These eateries are capitalizing on the perception that your drive-through burger and fries joint is detrimental to your health because of inferior ingredients.

The 7 modern fast food stocks we track reported a slower Q3. As a group, revenues missed analysts’ consensus estimates by 0.9%.

Amidst this news, share prices of the companies have had a rough stretch. On average, they are down 6.7% since the latest earnings results.

Noodles

Offering pasta, mac and cheese, pad thai, and more, Noodles & Company is a casual restaurant chain that serves all manner of noodles from around the world.

Noodles reported revenues of $122.1 million, flat year on year. This print exceeded analysts’ expectations by 1.9%. Overall, it was a very strong quarter for the company with an impressive beat of analysts’ EBITDA estimates and a solid beat of analysts’ revenue estimates.

Noodles scored the biggest analyst estimates beat but had the weakest full-year guidance update of the whole group. The results were likely priced in, however, and the stock is flat since reporting. It currently trades at $0.66.

Is now the time to buy Noodles? Access our full analysis of the earnings results here, it’s free for active Edge members.

Best Q3: Shake Shack

Started as a hot dog cart in New York City's Madison Square Park, Shake Shack is a fast-food restaurant known for its burgers and milkshakes.

Shake Shack reported revenues of $367.4 million, up 15.9% year on year, outperforming analysts’ expectations by 1%. The business had a very strong quarter with an impressive beat of analysts’ same-store sales estimates and a solid beat of analysts’ EBITDA estimates.

Although it had a fine quarter compared its peers, the market seems unhappy with the results as the stock is down 3.9% since reporting. It currently trades at $86.34.

Is now the time to buy Shake Shack? Access our full analysis of the earnings results here, it’s free for active Edge members.

Weakest Q3: Sweetgreen

Founded in 2007 by three Georgetown University alum, Sweetgreen is a casual quick service chain known for its healthy salads and bowls.

Sweetgreen reported revenues of $172.4 million, flat year on year, falling short of analysts’ expectations by 3.1%. It was a disappointing quarter as it posted full-year revenue guidance missing analysts’ expectations and full-year EBITDA guidance missing analysts’ expectations significantly.

Sweetgreen delivered the highest full-year guidance raise but had the slowest revenue growth in the group. As expected, the stock is down 4.7% since the results and currently trades at $5.96.

Read our full analysis of Sweetgreen’s results here.

Portillo's

Begun as a Chicago hot dog stand in 1963, Portillo’s is a casual restaurant chain that serves Chicago-style hot dogs and beef sandwiches as well as fries and shakes.

Portillo's reported revenues of $181.4 million, up 1.8% year on year. This print missed analysts’ expectations by 0.7%. Zooming out, it was actually a strong quarter as it recorded a beat of analysts’ EPS estimates and a solid beat of analysts’ same-store sales estimates.

The stock is down 10.5% since reporting and currently trades at $4.69.

Read our full, actionable report on Portillo's here, it’s free for active Edge members.

Chipotle

Born from a desire to offer quick meals with fresh, flavorful ingredients, Chipotle is a fast-food chain known for its healthy, Mexican-inspired cuisine and customizable dishes.

Chipotle reported revenues of $3.00 billion, up 7.5% year on year. This number was in line with analysts’ expectations. However, it was a slower quarter as it recorded a miss of analysts’ EBITDA estimates and revenue in line with analysts’ estimates.

The stock is down 22.9% since reporting and currently trades at $30.71.

Read our full, actionable report on Chipotle here, it’s free for active Edge members.

Noodles & Company’s third quarter drew a positive reaction from the market, with management highlighting improving sales momentum and enhanced operational discipline. CEO Joe Christina pointed to the strong performance of new menu items, the success of the Delicious Duos value platform, and improved digital sales channels as key factors. Christina specifically noted, “Comparable sales grew 4% in the third quarter, improving sequentially each month,” attributing this to deliberate investments in menu innovation and targeted marketing. The company also benefited from closing underperforming restaurants, transferring sales volume to higher-performing locations and supporting bottom-line improvement.

Is now the time to buy NDLS? Find out in our full research report (it’s free for active Edge members).

Noodles (NDLS) Q3 CY2025 Highlights:

• Revenue: $122.1 million vs analyst estimates of $119.8 million (flat year on year, 1.9% beat)
• Adjusted EPS: -$0.10 vs analyst estimates of -$0.11 (in line)
• Adjusted EBITDA: $6.50 million vs analyst estimates of $5.78 million (5.3% margin, 12.4% beat)
• The company slightly lifted its revenue guidance for the full year to $493.5 million at the midpoint from $491 million
• Operating Margin: -0.5%, up from -1.8% in the same quarter last year
• Locations: 435 at quarter end, down from 471 in the same quarter last year
• Same-Store Sales rose 4% year on year (-3.3% in the same quarter last year)
• Market Capitalization: $35.11 million

While we enjoy listening to the management's commentary, our favorite part of earnings calls are the analyst questions. Those are unscripted and can often highlight topics that management teams would rather avoid or topics where the answer is complicated. Here is what has caught our attention.

Our Top 5 Analyst Questions From Noodles’s Q3 Earnings Call

• Todd Brooks (The Benchmark Company) asked about the effectiveness and repeat rates of the Delicious Duos platform. CEO Joseph Christina explained that the platform is attracting both new and existing guests, and that a steady mix of 4% to 5% supports menu upselling opportunities.

• Todd Brooks (The Benchmark Company) inquired about traffic growth excluding the benefit from closed store sales transfers. CFO Michael Hynes clarified that organic traffic remained positive even after accounting for the approximately 1% lift from transferred sales.

• Todd Brooks (The Benchmark Company) questioned the potential for Chili Garlic Ramen to become a permanent menu item. Christina responded that while it’s too early to commit, the dish is performing well and its future status will be evaluated after the promotion ends.

• Ivan Yu (Jefferies Group) asked about the margin benefit from closures in the third quarter. Hynes reported a $300,000 adjusted EBITDA benefit in Q3, with more substantial impact expected as closures accelerate.

• Ivan Yu (Jefferies Group) sought details on the fourth quarter’s check benefit as the company laps last year’s heavy discounts. Hynes noted that the majority of the check increase would normalize post-Thanksgiving, leading to more typical year-over-year comparisons in December.

Catalysts in Upcoming Quarters

In the coming quarters, our analysts will be closely tracking (1) the sustained impact of new menu launches and limited-time offerings on both traffic and average check, (2) the execution and financial effects of further restaurant closures as the company optimizes its portfolio, and (3) the effectiveness of cost-saving initiatives, including labor model adjustments and marketing efficiency improvements. Updates on the strategic alternatives review will also be a key area of focus.

Noodles currently trades at $0.72, up from $0.66 just before the earnings. At this price, is it a buy or sell? Find out in our full research report (it’s free for active Edge members).

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Wrapping up Q3 earnings, we look at the numbers and key takeaways for the modern fast food stocks, including CAVA and its peers.

Modern fast food is a relatively newer category representing a middle ground between traditional fast food and sit-down restaurants. These establishments feature an expanded menu selection priced above traditional fast food options, often incorporating fresher and cleaner ingredients to serve customers prioritizing quality. These eateries are capitalizing on the perception that your drive-through burger and fries joint is detrimental to your health because of inferior ingredients.

The 7 modern fast food stocks we track reported a slower Q3. As a group, revenues missed analysts’ consensus estimates by 0.9%.

While some modern fast food stocks have fared somewhat better than others, they have collectively declined. On average, share prices are down 4.8% since the latest earnings results.

CAVA

Starting from a single Washington, D.C. location, CAVA operates a fast-casual restaurant chain offering customizable Mediterranean-inspired dishes.

CAVA reported revenues of $292.2 million, up 19.9% year on year. This print was in line with analysts’ expectations, but overall, it was a slower quarter for the company with full-year EBITDA guidance missing analysts’ expectations and a slight miss of analysts’ same-store sales estimates.

CAVA scored the fastest revenue growth of the whole group. Still, the market seems discontent with the results. The stock is down 2.7% since reporting and currently trades at $49.35.

Read our full report on CAVA here, it’s free for active Edge members.

Best Q3: Shake Shack

Started as a hot dog cart in New York City's Madison Square Park, Shake Shack is a fast-food restaurant known for its burgers and milkshakes.

Shake Shack reported revenues of $367.4 million, up 15.9% year on year, outperforming analysts’ expectations by 1%. The business had a very strong quarter with a solid beat of analysts’ same-store sales estimates and an impressive beat of analysts’ EBITDA estimates.

The market seems content with the results as the stock is up 2.7% since reporting. It currently trades at $92.35.

Is now the time to buy Shake Shack? Access our full analysis of the earnings results here, it’s free for active Edge members.

Weakest Q3: Sweetgreen

Founded in 2007 by three Georgetown University alum, Sweetgreen is a casual quick service chain known for its healthy salads and bowls.

Sweetgreen reported revenues of $172.4 million, flat year on year, falling short of analysts’ expectations by 3.1%. It was a disappointing quarter as it posted full-year revenue guidance missing analysts’ expectations significantly and full-year EBITDA guidance missing analysts’ expectations.

Sweetgreen delivered the highest full-year guidance raise but had the slowest revenue growth in the group. As expected, the stock is down 16.5% since the results and currently trades at $5.22.

Read our full analysis of Sweetgreen’s results here.

Noodles

Offering pasta, mac and cheese, pad thai, and more, Noodles & Company is a casual restaurant chain that serves all manner of noodles from around the world.

Noodles reported revenues of $122.1 million, flat year on year. This result topped analysts’ expectations by 1.9%. It was a very strong quarter as it also logged a solid beat of analysts’ EBITDA estimates and an impressive beat of analysts’ revenue estimates.

Noodles achieved the biggest analyst estimates beat but had the weakest full-year guidance update among its peers. The stock is up 8.3% since reporting and currently trades at $0.72.

Read our full, actionable report on Noodles here, it’s free for active Edge members.

Portillo's

Begun as a Chicago hot dog stand in 1963, Portillo’s is a casual restaurant chain that serves Chicago-style hot dogs and beef sandwiches as well as fries and shakes.

Portillo's reported revenues of $181.4 million, up 1.8% year on year. This number missed analysts’ expectations by 0.7%. Zooming out, it was actually a strong quarter as it produced a beat of analysts’ EPS estimates and a solid beat of analysts’ same-store sales estimates.

The stock is down 10.2% since reporting and currently trades at $4.71.

Read our full, actionable report on Portillo's here, it’s free for active Edge members.

Market Update

Thanks to the Fed’s rate hikes in 2022 and 2023, inflation has been on a steady path downward, easing back toward that 2% sweet spot. Fortunately (miraculously to some), all this tightening didn’t send the economy tumbling into a recession, so here we are, cautiously celebrating a soft landing. The cherry on top? Recent rate cuts (half a point in September 2024, a quarter in November) have propped up markets, especially after Trump’s November win lit a fire under major indices and sent them to all-time highs. However, there’s still plenty to ponder — tariffs, corporate tax cuts, and what 2025 might hold for the economy.