CAVA Group, Inc. (CAVA) AI Stock Analysis

• Market Cap: $7.03B
• Dividend Yield: N/A
• Average Volume (3M): 3.24M
• Price to Earnings (P/E): 52.3
• 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: 3,117,614
• 30 Day Avg. Volume: 3,237,274
• 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: 1.02
• Enterprise Value/Revenue: 6.35
• Enterprise Value/Gross Profit: 22.42
• Enterprise Value/Ebitda: 49.09
• 1Y Price Target: $75.33
• Price Target Upside: 24.27% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 17
• EPS Forecast (FY): 0.57
• Revenue Forecast (FY): $1.42B

• Rating: 73 Outperform
• Price Target: $68.00 ▲(12.17% Upside)

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

Margin Sustainability

CAVA's TTM gross margin (28.33%) and net margin (12.14%) reflect durable per-unit economics for a fast-casual concept. Strong margins provide a multi-year cushion versus commodity and labor inflation, supporting profitable new openings and reinvestment without immediate margin erosion.

Scalable Unit Growth

Management has demonstrated repeatable unit expansion (415 stores, 17 net adds) and plans 68–70 openings in 2025. Sustained, controlled unit growth can compound revenue and brand reach while spreading corporate costs, provided unit-level economics remain stable over several quarters.

Customer Loyalty & Digital Investment

A 36% lift in the loyalty program signals improving retention and higher lifetime value. Coupled with rollouts of kitchen display systems and digital ordering, this strengthens recurring sales, operational throughput and off-premise margins—structural drivers of sustainable revenue and unit profitability.

Negative Factors

Weak Free Cash Flow Conversion

A sharp decline in FCF growth and a low FCF-to-net income ratio constrain internally generated funds for openings and capex. Over time poor cash conversion increases reliance on external financing or equity, raising execution risk and limiting flexibility during slower demand periods.

Moderating Same-Restaurant Sales

Only 1.9% comp growth indicates muted underlying demand and limited pricing power. If same-store trends remain tepid, corporate revenue growth will depend more on unit openings, pressuring ROI per new restaurant and making long-term margin expansion harder without sustained traffic gains.

Rising Operating & Preopening Costs

An 80bp rise in operating costs from delivery mix and insurance, plus higher preopening spend, compresses restaurant-level margins. Persistently elevated delivery and insurance costs can erode the economics of off-premise sales and make new-unit paybacks longer, weighing on long-term returns.

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: Negative
• Last Price: 60.62
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Negative
• MACD: Positive
• RSI: Neutral
• STOCH: Positive

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For CAVA, the sentiment is Negative. The current price of 60.62 is below the 20-day moving average (MA) of 66.65, above the 50-day MA of 58.57, and below the 200-day MA of 70.92, indicating a neutral trend. The MACD of 0.77 indicates Positive momentum. The RSI at 41.95 is Neutral, neither overbought nor oversold. The STOCH value of 11.70 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for CAVA.

CAVA Group, Inc. Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
EAT	74 Outperform	$6.87B	15.93	177.80%	―	23.18%	138.17%
CAVA	73 Outperform	$7.03B	52.25	19.84%	―	23.93%	153.50%
CAKE	66 Neutral	$2.89B	17.60	39.14%	2.11%	4.90%	27.14%
WING	65 Neutral	$7.38B	43.33	―	0.45%	15.56%	79.02%
SHAK	62 Neutral	$3.78B	87.00	8.83%	―	13.49%	402.23%
Sector *	61 Neutral	$18.38B	12.79	-2.54%	3.03%	1.52%	-15.83%
SG	48 Neutral	$726.81M	-6.36	-26.47%	―	2.43%	-23.25%