CAVA Group, Inc. (CAVA) AI Stock Analysis

• Market Cap: $7.86B
• Dividend Yield: N/A
• Average Volume (3M): 3.09M
• Price to Earnings (P/E): 59.0
• Beta (1Y): 1.74
• Revenue Growth: 23.93%
• EPS Growth: 153.50%
• Country: US
• Employees: 10,300
• Sector: Consumer Cyclical
• Sector Strength: 84
• Industry: Restaurants
• EPS (TTM): 0.12
• Shares Outstanding: 115,986,120
• 10 Day Avg. Volume: 2,859,836
• 30 Day Avg. Volume: 3,094,826
• PEG Ratio: 0.23
• Price to Book (P/B): 18.32
• Price to Sales (P/S): 13.23
• P/FCF Ratio: 240.96
• Enterprise Value/Market Cap: 1.06
• Enterprise Value/Revenue: 7.32
• Enterprise Value/Gross Profit: 25.85
• Enterprise Value/Ebitda: 56.60
• 1Y Price Target: $77.29
• Price Target Upside: 10.24% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 15
• EPS Forecast (FY): 0.58
• Revenue Forecast (FY): $1.42B

• Rating: 73 Outperform
• Price Target: $68.00 ▼(-3.01% Downside)

The score is driven primarily by solid fundamentals (healthy margins/ROE and manageable leverage) and a constructive earnings outlook with continued expansion and stable unit economics. Offsetting factors are premium valuation (high P/E, no dividend) and technically overbought conditions that raise near-term volatility/pullback risk.

Positive Factors

Strong Profitability

Sustained net margins and high ROE indicate efficient unit economics and disciplined cost control across restaurants. This profitability supports reinvestment in new openings, menu innovation and loyalty programs, underpinning multi-quarter cash generation and growth capacity.

Manageable Leverage

A moderate debt load and strong equity base provide financial flexibility to fund aggressive unit growth without excessive refinancing risk. This balance sheet posture supports capital expenditures, preopening costs and strategic investments over the next several quarters.

Proven Expansion Track Record

Consistent net unit growth and clear forward openings guidance reflect a scalable operating model and repeatable rollout playbook. Established unit economics and rollout cadence should drive durable system-level revenue growth and market share gains over multiple quarters.

Negative Factors

Weak Free Cash Flow Conversion

Low free cash flow relative to net income limits internal funding for expansion and increases reliance on external capital or debt. Persistently weak FCF conversion can constrain reinvestment, reduce margin of safety, and pressure liquidity during multi-quarter expansion plans.

Moderating Same-Restaurant Sales

Slowing comparable sales growth signals pressure on traffic or spend per visit, which can erode unit-level leverage as new restaurants add fixed costs. If sustained, muted comps reduce throughput-driven margin expansion and make projected unit economics harder to maintain.

Rising Operating and Preopening Costs

Higher third-party delivery mix, insurance and elevated preopening costs compress restaurant-level margins and raise the breakeven for new units. Persistent cost inflation in these categories can structurally reduce profit per store and slow return-on-invested-capital as the chain scales.

CAVA Group, Inc. Business Overview & Revenue Model

Company Description

CAVA Group, Inc. owns and operates a chain of Mediterranean restaurants. The company offers salads, dips, spreads, toppings, and dressings. It sells its products through whole food markets and grocery stores. The company also provides online food ordering services. Cava Group, Inc. was founded in 2006 and is based in Washington, District of Columbia.

How the Company Makes Money

CAVA generates revenue primarily through its restaurant operations, which include in-store dining, takeout, and catering services. The company makes money by selling its food and beverage offerings directly to consumers at its locations. In addition to in-store sales, CAVA has developed a line of packaged dips and spreads that are distributed through retail grocery channels, creating an additional revenue stream. Strategic partnerships with food distributors and suppliers help optimize costs and ensure a steady supply of high-quality ingredients, contributing to the company's profitability. CAVA also benefits from an increasing consumer trend towards healthier eating, which drives traffic to its restaurants and boosts sales.

CAVA Group, Inc. Financial Statement Overview

Summary

Strong profitability and returns (TTM net margin 12.14%, ROE 18.69%) with manageable leverage (debt-to-equity 0.58). The main offset is weaker cash conversion, with free cash flow growth down 46.43% and low FCF-to-net income (0.15).

Income Statement

CAVA Group, Inc. has demonstrated strong revenue growth with a TTM (Trailing-Twelve-Months) revenue increase of 4.47%. The company shows solid profitability with a gross profit margin of 28.33% and a net profit margin of 12.14% in the TTM period. EBIT and EBITDA margins are healthy at 6.74% and 12.94%, respectively. The consistent improvement in margins and revenue growth indicates a positive trajectory in financial performance.

Balance Sheet

The balance sheet reflects a moderate debt-to-equity ratio of 0.58 in the TTM period, indicating manageable leverage. Return on equity is strong at 18.69%, showcasing effective use of equity to generate profits. The equity ratio stands at 58.16%, suggesting a stable financial structure. Overall, the balance sheet is robust with a good balance between debt and equity.

Cash Flow

CAVA's cash flow statement shows a decline in free cash flow growth by 46.43% in the TTM period, which is a concern. However, the operating cash flow to net income ratio is 1.10, indicating that operating cash flows adequately cover net income. The free cash flow to net income ratio is 0.15, suggesting limited free cash flow relative to net income. While cash flow management needs improvement, the company maintains a positive operating cash flow.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021
Income Statement
Total Revenue	1.13B	963.71M	728.70M	564.12M	500.07M
Gross Profit	320.75M	241.81M	180.35M	97.98M	82.15M
EBITDA	146.48M	121.31M	78.86M	27.95M	12.07M
Net Income	137.44M	130.32M	13.28M	-58.99M	-37.39M
Balance Sheet
Total Assets	1.32B	1.17B	983.76M	583.88M	362.19M
Cash, Cash Equivalents and Short-Term Investments	387.69M	366.12M	332.43M	39.13M	140.33M
Total Debt	443.34M	378.71M	336.20M	314.73M	15.34M
Total Liabilities	552.97M	474.10M	412.95M	1.03B	755.22M
Stockholders Equity	769.01M	695.57M	570.80M	-448.50M	-393.02M
Cash Flow
Free Cash Flow	25.38M	52.90M	-41.70M	-98.28M	-53.02M
Operating Cash Flow	174.39M	161.03M	97.10M	6.04M	3.39M
Investing Cash Flow	-256.55M	-108.13M	-138.81M	-104.16M	-56.31M
Financing Cash Flow	-430.00K	-19.20M	335.01M	-3.08M	143.15M

CAVA Group, Inc. Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 70.11
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Negative
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For CAVA, the sentiment is Positive. The current price of 70.11 is above the 20-day moving average (MA) of 65.17, above the 50-day MA of 63.15, and above the 200-day MA of 69.28, indicating a bullish trend. The MACD of 1.15 indicates Negative momentum. The RSI at 59.41 is Neutral, neither overbought nor oversold. The STOCH value of 64.21 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for CAVA.

CAVA Group, Inc. Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
CAVA	73 Outperform	$7.86B	58.99	19.84%	―	23.93%	153.50%
EAT	68 Neutral	$6.89B	15.21	177.80%	―	23.18%	138.17%
CAKE	66 Neutral	$3.19B	20.94	―	2.11%	4.90%	27.14%
SHAK	62 Neutral	$4.02B	91.53	8.83%	―	13.49%	402.23%
WING	62 Neutral	$7.75B	44.96	―	0.45%	15.56%	79.02%
Sector *	61 Neutral	$18.38B	12.79	-2.54%	3.03%	1.52%	-15.83%
SG	48 Neutral	$704.32M	-6.25	-26.47%	―	2.43%	-23.25%