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Habit's fourth-quarter report is well done, but shares drop back

Habit Burger

It's quite a week for the better burger. Two new stocks in the premium hamburger group are reporting their first earnings results as public companies, and the first of those, Habit Restaurants (HABT), did so Tuesday.

When it did, the fourth-quarter numbers surpassed Wall Street's outlook -- although the view for 2015 appeared to be not enough for traders, as shares fell in the late session. Habit's stock rose in regular trading to close at $35.55, but after the report, it fell 6.2% to $33.34.

The California-based burger seller, which began trading last November, said revenue for the quarter was $48.4 million, up from $35.5 million in the prior year (which included an additional week), while same-store sales climbed 13.2%. Habit earned 2 cents a share. According to FactSet, analysts were planning on Habit to break even on a per-share basis, with sales of $44.4 million. Same-store sales were estimated at a 7.8% increase. For the year, revenue increased 45.1% to $174.6 million.

In 2015, Habit currently sees revenue of $216 million to $219 million. And even though that would mean a gain of at least 23% from the past year and be above the $214.8 million analyst consensus, it's a slower pace. Considering Habit has traded at premium valuations, investors likely wanted an even higher estimate. Comparable-restaurant sales probably will be up 2.5% to 3% this year, Habit says.

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On Wednesday, the other closely watched name will detail its numbers. That's Shake Shack (SHAK), the New York brand started by restaurant entrepreneur Danny Meyer.

Though the reports this week clearly are about Habit and Shake Shack, they're also central to a larger story about eating in the U.S. and overseas. They tell us about the burger industry at large, about Smashburger and Five Guys, and about McDonald's (MCD) and Burger King.

Higher-end burgers are one of the stars of the dining scene today. That's meant already tremendous competition in the hamburger segment has gotten even more tremendous. At the same time, innovation has been constant, and traditional burger companies have had to figure out how to stay relevant. McDonald's and others on the fast-food side do have advantages -- name recognition, scale and the ability to keep prices relatively low. But where they're losing ground is in the perception that their ingredients don't have the quality of the new restaurants.

Fast food will be a gigantic industry for years and years because it's so entrenched. However, the large chains have made steps toward "premium" to stay there, including new breads and cheeses at Wendy's (WEN) that are more associated with artisan-style food, with the goal of bringing in choosier consumers. It's seen in other areas, too, such as McDonald's move to limit certain antibiotics in its chicken.

The buzz around Habit and Shake Shack remains considerable. Investors now are getting an opportunity to see if those lofty price-to-earnings ratios -- they're well into the 100s -- that are built on the hopes of outsized growth far into the future make sense. For the time being, at Habit at least, they might not.