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CAVA Group, Inc. (CAVA)
NYSE:CAVA
US Market
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CAVA Group, Inc. (CAVA) AI Stock Analysis

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CAVA

CAVA Group, Inc.

(NYSE:CAVA)

Rating:79Outperform
Price Target:
$103.00
▲(12.34%Upside)
CAVA's strong financial performance and positive sentiment from the earnings call are significant strengths, contributing to a high score. Technical analysis suggests positive momentum but indicates caution due to potential overvaluation. The lack of a dividend yield also affects valuation appeal.
Positive Factors
Brand Growth
CAVA's broad consumer appeal and increasing brand awareness have led to impressive new unit productivity and profitability.
Financial Performance
CAVA's latent pricing power, whitespace opportunities, and potential P&L efficiencies can drive sustainable earnings growth and/or positive EPS revisions over time.
Negative Factors
Short-term Sales
2Q comps could fall modestly below the Street mean, primarily due to the difficult lap created by the successful launch of Grilled Steak in early June 2024.
Valuation Risks
The analysis provides upside to the current share price in most scenarios, except when using higher discount rates and lower multiples.

CAVA Group, Inc. (CAVA) vs. SPDR S&P 500 ETF (SPY)

CAVA Group, Inc. Business Overview & Revenue Model

Company DescriptionCAVA 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 MoneyCAVA Group, Inc. generates revenue primarily through its chain of fast-casual restaurants, where customers pay for dine-in and take-out meals. The company's revenue model focuses on direct sales of its Mediterranean-inspired menu items, leveraging its ability to create customizable dining experiences that attract a broad customer base. Additionally, CAVA benefits from strategic partnerships with delivery services and has integrated digital ordering platforms to enhance customer convenience and increase sales. The company's emphasis on using fresh, high-quality ingredients allows it to maintain a premium pricing strategy, further contributing to its revenue. Moreover, CAVA's expansion strategy, including new restaurant openings and acquisitions, plays a crucial role in growing its market presence and boosting earnings.

CAVA Group, Inc. Earnings Call Summary

Earnings Call Date:May 15, 2025
(Q1-2025)
|
% Change Since: -7.44%|
Next Earnings Date:Aug 19, 2025
Earnings Call Sentiment Positive
The earnings call reflects a strong positive sentiment with significant growth in revenue, same restaurant sales, and net income. The company has successfully expanded its restaurant base and loyalty program, while maintaining strong liquidity and cash flow. Although there were some increased costs associated with food and pre-opening expenses, these were relatively minor compared to the robust growth metrics.
Q1-2025 Updates
Positive Updates
Strong Revenue Growth
CAVA's revenue in the first quarter of 2025 grew 28.2% year-over-year to $328.5 million.
Same Restaurant Sales and Traffic Increase
CAVA same restaurant sales increased 10.8%, driven by traffic growth of 7.5%.
Expansion and Restaurant Openings
Opened 15 net new restaurants, ending the quarter with 382 restaurants, representing an 18.3% increase year-over-year.
Adjusted EBITDA Growth
Adjusted EBITDA of $44.9 million, a 34.6% increase over the first quarter of 2024.
Net Income Surge
Net income of $25.7 million, an 83.7% increase over the first quarter of 2024.
Surpassing Revenue Milestone
Surpassed $1 billion in revenue on a trailing 12-month basis.
Loyalty Program Expansion
Loyalty program membership approaching 8 million, with sales through the program up 340 basis points as a percentage of total revenue.
Positive Cash Flow and Strong Liquidity
Free cash flow of $2.7 million, with $369.4 million in cash and investments and zero debt outstanding.
Negative Updates
Increased Food and Packaging Costs
CAVA's food, beverage, and packaging costs were 29.3% of revenue, higher by 110 basis points due to the impact of steak.
Pre-Opening Cost Increase
Pre-opening expenses increased by $1.1 million due to timing of projects and higher rent geographies.
Company Guidance
In the first quarter of 2025, CAVA reported a 28.2% increase in revenue, reaching $328.5 million, and a same restaurant sales growth of 10.8%, driven by a 7.5% increase in traffic. The company opened 15 net new restaurants, expanding its total to 382, marking an 18.3% increase year-over-year. Adjusted EBITDA increased by 34.6% to $44.9 million, while net income rose by 83.7% to $25.7 million compared to the first quarter of 2024. CAVA also achieved $2.7 million in free cash flow and surpassed $1 billion in revenue on a trailing 12-month basis. The company remains on track for its 2025 guidance of 64 to 68 net new restaurant openings and a same restaurant sales growth of 6% to 8%.

CAVA Group, Inc. Financial Statement Overview

Summary
CAVA Group, Inc. demonstrates strong financial performance with impressive revenue growth and profitability improvements. The balance sheet reflects a healthy equity position but requires careful debt management. Cash flows are robust, supporting continued investments and operations.
Income Statement
85
Very Positive
CAVA Group, Inc. has demonstrated strong revenue growth, notably a TTM revenue of $1.30 billion, reflecting a significant increase over recent years. Gross profit margin has improved, reaching approximately 22.8% in TTM, indicating effective cost management. Net profit margin is also robust at 12.04%, showing substantial profitability. The company has improved its EBIT and EBITDA margins, reaching 5.25% and 12.36% respectively, suggesting strong operational performance.
Balance Sheet
78
Positive
The balance sheet shows a solid equity position with an equity ratio of 59.12% in TTM, which indicates a strong reliance on equity financing. However, the debt-to-equity ratio has increased to 0.57, suggesting careful monitoring is needed to manage leverage. Return on equity is a strong 21.49%, highlighting effective use of equity in generating profits.
Cash Flow
82
Very Positive
CAVA exhibits a healthy cash flow profile with positive free cash flow and a free cash flow growth rate of 5.11% in TTM. The operating cash flow to net income ratio stands at 1.28, indicating solid cash generation relative to reported net income. Free cash flow to net income ratio is 0.36, suggesting that while profitable, investments and other cash uses are significant.
BreakdownDec 2024Dec 2023Dec 2022Dec 2021
Income Statement
Total Revenue963.71M728.70M564.12M500.07M
Gross Profit241.81M180.35M55.26M37.62M
EBITDA103.79M78.86M-16.12M12.07M
Net Income130.32M13.28M-58.99M-37.39M
Balance Sheet
Total Assets1.17B983.76M654.43M362.83M
Cash, Cash Equivalents and Short-Term Investments366.12M332.43M39.13M140.33M
Total Debt378.71M336.20M314.73M15.34M
Total Liabilities474.10M412.95M440.63M93.55M
Stockholders Equity695.57M570.80M213.81M269.29M
Cash Flow
Free Cash Flow52.90M-41.70M-98.28M-53.02M
Operating Cash Flow161.03M97.10M6.04M3.39M
Investing Cash Flow-108.13M-138.81M-104.16M-56.31M
Financing Cash Flow-19.20M335.01M-3.08M143.15M

CAVA Group, Inc. Technical Analysis

Technical Analysis Sentiment
Positive
Last Price91.69
Price Trends
50DMA
84.17
Positive
100DMA
85.44
Positive
200DMA
107.44
Negative
Market Momentum
MACD
2.23
Negative
RSI
63.86
Neutral
STOCH
65.66
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 91.69 is above the 20-day moving average (MA) of 86.02, above the 50-day MA of 84.17, and below the 200-day MA of 107.44, indicating a neutral trend. The MACD of 2.23 indicates Negative momentum. The RSI at 63.86 is Neutral, neither overbought nor oversold. The STOCH value of 65.66 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for CAVA.

CAVA Group, Inc. Risk Analysis

CAVA Group, Inc. disclosed 53 risk factors in its most recent earnings report. CAVA Group, Inc. reported the most risks in the "Finance & Corporate" category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks

CAVA Group, Inc. Peers Comparison

Overall Rating
UnderperformOutperform
Sector (64)
Financial Indicators
Name
Overall Rating
Market Cap
P/E Ratio
ROE
Dividend Yield
Revenue Growth
EPS Growth
79
Outperform
$10.40B75.0221.73%32.11%378.62%
74
Outperform
$3.27B20.7246.60%1.58%4.42%48.23%
70
Outperform
$5.88B479.532.70%14.07%-47.47%
69
Neutral
$1.12B105.281.86%14.43%-53.71%
67
Neutral
$1.79B-19.79%11.10%18.05%
66
Neutral
$8.95B53.82-16.09%0.34%30.98%112.65%
64
Neutral
£1.74B10.386.12%253.66%0.55%-33.66%
* Consumer Cyclical Sector Average
Performance Comparison
Ticker
Company Name
Price
Change
% Change
CAVA
CAVA Group, Inc.
91.69
13.46
17.21%
CAKE
Cheesecake Factory
68.51
32.67
91.16%
SHAK
Shake Shack
137.77
58.93
74.75%
WING
Wingstop
319.26
-39.81
-11.09%
FWRG
First Watch Restaurant Group
18.34
3.31
22.02%
SG
Sweetgreen
16.26
-8.14
-33.36%

CAVA Group, Inc. Corporate Events

Executive/Board ChangesShareholder Meetings
CAVA Group Holds Annual Stockholders Meeting
Neutral
Jun 25, 2025

On June 20, 2025, CAVA Group, Inc. held its annual meeting of stockholders where several key decisions were made. The stockholders approved the election of three Class II directors to the Board, endorsed the executive compensation plan, decided on an annual advisory vote for executive compensation, and ratified Deloitte & Touche LLP as the independent accounting firm for the year ending December 28, 2025.

The most recent analyst rating on (CAVA) stock is a Buy with a $148.00 price target. To see the full list of analyst forecasts on CAVA Group, Inc. stock, see the CAVA Stock Forecast page.

Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.

Disclaimer

This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.Date of analysis: Jul 10, 2025