Drew
3
All posts from Drew
Drew in Just my thoughts,

The Company That Could Be The Chipotle of Pizza

You might not have heard of Rave Restaurant Group (NASDAQ: RAVE,) but they have been on fire lately.

They are up 20% since the beginning of the year and show no signs of slowing down, even considering this recent instability. Most of the hype is because of one of their restaurant chains that offers made to order pizzas in 5 minutes or less, called Pie Five. That quick service but high quality model sounds a lot like everyone's favorite Burrito spot, Chipotle (NYSE: CMG.)

Chipotle is the envy of every fast food chain, and they have a lot of imitators. It seems like Pie Five is the first restaurant to successfully translate this model into the pizza world. My fear is that being the first doesn't mean they are going to be the best. There is so much competition in this space that it’s too soon to tell who is going to come out on top. I feel like Domino's (NYSE: DPZ) could come out with their own version that crushes these littler companies. I mean, Domino’s supposedly will have the tech to receive Pizza emoji’s as texts and start a delivery order.

Those who think Pie Five is an unstoppable force will site it's tremendous growth and it’s value as a standalone company that can ultimately be spun off from RAVE. That could be true, but working against it is it’s super corny name that reminds me of the scrapped title for some horrible Disney Channel show, as well as the stiff competition. I would be wary with this one. Making long bets based on their recent hot performance could come back to bite you.