William Blair analyst Sharon Zackfia has reiterated their bullish stance on CAVA stock, giving a Buy rating yesterday.
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Sharon Zackfia has given her Buy rating due to a combination of factors, despite CAVA’s recent challenges. The company’s second-quarter performance showed a miss in comparable sales expectations, primarily due to slower trends in June and tough comparisons from the previous year. However, the adjusted EBITDA exceeded expectations, largely because of lower general and administrative expenses.
Despite the shortfall in comparable sales, CAVA’s new locations have been performing exceptionally well, surpassing year-one targets and contributing to strong cash-on-cash returns. This robust performance in newer markets suggests potential for future growth, even though it might lead to some variability in comparable sales. These positive indicators, along with rebounding trends observed in the third quarter, underpin Zackfia’s optimistic outlook and Buy rating for CAVA Group, Inc.
In another report released yesterday, TD Cowen also maintained a Buy rating on the stock with a $90.00 price target.