Stock Price & Analysis

CAVA stock is currently showing volatility with a mix of positive growth prospects and high valuation risks. Consider buying if you believe in its long-term expansion potential, but exercise caution due to recent price drops and high expectations.

CAVA stock is predicted to reach $120 in 2025, driven by strong same-store sales growth and positive analyst upgrades. The stock has a target range of $115 to $130, supported by its successful expansion strategy and improving profit margins. Analysts remain bullish due to its robust Q4 performance and growth prospects.

The S1 support level for CAVA Stock is $75.62 ,The R1 resistant level for CAVA Stock is $92.12.

As of the end of day on 2025-03-17, the price of CAVA Stock was $77.5.

The target price for CAVA Stock according to analyst rating is 134.92, with the highest price target at 175.00 and the lowest at 100.00. Analysts have a Moderate Buy rating on CAVA Stock overall.

The market cap of CAVA is $9.0B.

Analysis and Insights

CAVA Group Inc. (CAVA) appears to be overvalued based on its current financial performance and market expectations. Here's a detailed breakdown:

Valuation Metrics:

CAVA's valuation metrics suggest a premium relative to its peers and industry averages. The stock currently trades at a P/E ratio of 171.87 and an EV/EBITDA of 85.47, both significantly higher than industry benchmarks. This indicates that investors are pricing in high growth expectations that may not be fully justified by its current financial performance.

Revenue and Profitability:

While CAVA has shown revenue growth, with Q4 2024 revenue of $227.4 million beating estimates, its profitability metrics are less impressive. The company's net income margin of 5.09% and ROE of 2.96% are below industry averages, raising concerns about its ability to generate strong returns for shareholders.

Same-Store Sales Growth:

CAVA's same-store sales growth of 21.2% in Q4 2024 was strong, but its FY2025 guidance of 6-8% falls short of analyst expectations of 8.17%. This conservative outlook, combined with weak consumer spending trends, could weigh on the stock's valuation.

Analyst Sentiment:

Analysts have mixed views on CAVA, with a consensus rating of "Moderate Buy" and an average price target of $133.55, representing a 40.53% upside. However, several firms have lowered their price targets following the company's mixed Q4 earnings and conservative FY2025 guidance.

Stock Price Performance:

CAVA's stock price has been volatile, with a significant drop following its Q4 earnings report. The stock currently trades at $78.77, down 15.75% year-to-date, reflecting investor concerns about its growth prospects and valuation.

Conclusion:

CAVA's high valuation multiples, combined with its conservative growth outlook and weak profitability metrics, suggest that the stock is overvalued at current levels. While the company has a strong brand and growth potential, investors may want to wait for a pullback or clearer signs of improving fundamentals before entering the stock.

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CAVA Group, Inc. operates a category-defining Mediterranean fast-casual restaurant brand. The Company operates approximately 309 fast-casual CAVA restaurants in 24 states and Washington, D.C. The number of CAVA restaurants excludes two locations operating under a licensing arrangement and digital kitchens. Its Mediterranean cuisine unites taste and health, with a menu that features chef-crated and customizable bowls and pitas. Its dips, spreads, and dressings are centrally produced and sold in grocery stores. Its menu fulfills a range of dietary preferences, from hearty and indulgent to vegan, vegetarian, gluten-free, dairy-free, paleo, keto, and nut-free diets. The Company's guests can choose a chef-curated meal or a build-your-own-bowl or pita using its 38 ingredients with over 17.4 billion combinations. It has developed multi-channel access to in-restaurant dining, digital pick-up, drive-thru pick-up in select restaurants, delivery, catering, and consumer packaged goods offerings.

CAVA stock is predicted to reach $120-$150 by 2030, driven by strong expansion plans and profitability growth.

• Expansion and profitability: CAVA plans to open 62-66 new restaurants in 2025, with expected same-store sales growth of 6%-8% and rising profit margins.
• Analyst confidence: The average price target is $133.55, with a high of $175, reflecting strong growth expectations.
• Valuation: While the stock is pricey now, sustained growth could justify higher prices.

CAVA has a total of 8100 employees.