CAVA Should I Buy
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CAVA Group Inc is not a strong buy at the moment for a beginner investor with a long-term strategy. While the company has growth potential and positive analyst ratings, the technical indicators, insider selling trends, and recent financial performance suggest caution. Holding the stock or waiting for a better entry point may be more prudent.
The MACD is negatively expanding, RSI is neutral at 40.312, and moving averages are converging, indicating no clear upward momentum. The stock is trading below the pivot point of 65.524, with support at 59.897 and resistance at 71.151. This suggests a bearish or neutral short-term trend.
Prime Capital Management increased its stake in CAVA Group, showing institutional confidence. The company plans to expand to over 1,000 restaurants by 2032, indicating long-term growth potential. Revenue grew 23% in the first nine months of fiscal 2025.
Insiders are selling heavily, with a 1239.39% increase in selling activity over the last month. The stock price dropped 48.5% over the past year, and financial metrics like net income, EPS, and gross margin have declined YoY. The technical indicators do not show a strong upward trend.
In Q3 2025, revenue increased by 19.86% YoY to $292.2M, but net income dropped by 17.92% YoY to $14.75M. EPS declined by 20% YoY to 0.12, and gross margin fell by 4.29% to 25.41%. The financial performance shows growth in revenue but declining profitability.
Analysts are generally positive, with multiple Buy ratings and price targets ranging from $64 to $85. Benchmark initiated coverage with a Buy rating and an $80 price target, citing leadership in the Mediterranean category and strong unit economics. However, some analysts have Neutral ratings, reflecting mixed sentiment.
