Market snapshot & immediate developments#
Shares of CAVA moved higher amid headline attention on the company's upcoming Q2 release and an already rich valuation — a classic growth-versus-execution tension that will be tested by top-line beats and margin disclosure.
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Intraday quotes show $84.54 per share, up +2.72%, with a market capitalization near $9.78B; these figures reflect a market priced for rapid scale even as EPS and margin dynamics remain uneven. (Source: Monexa AI
Management set the Q2 release date for August 12; sell‑side consensus ahead of the print points to $0.13 EPS and $286.6M revenue, framing the near-term narrative as revenue growth versus margin pressure. (Sources: CAVA Investor Relations, Monexa AI
What is driving CAVA's valuation premium?#
What: CAVA's valuation premium is driven by aggressive unit expansion and the market's expectation that new stores will deliver high AUVs and improving restaurant-level margins — a payoff that requires execution across openings, supply-chain scale, and cost control.
More company-news-CAVA Posts
CAVA Group: 2024 Profit Surge Meets Q2 Traffic Slowdown
CAVA reported **FY2024 revenue of $963.71M (+32.25%)** and **net income of $130.32M (+881.32%)**, but management flagged Q2 same-store traffic weakness that clouds the growth story.
CAVA Group: Q2 Shock — Slowing Comps, Strong Unit Economics, Big Execution Risk
Shares plunged ~22% after Q2 revealed SRS growth of **+2.1%**, a lowered FY SRS guide of **+4.0%–6.0%**, and a valuation that still prices aggressive expansion.
CAVA Group, Inc. Stock Analysis: Growth, Valuation, and Market Position Insights
Detailed analysis of CAVA Group's recent financial performance, expansion strategy, and market position ahead of Q2 2025 earnings release.
The market is explicit: trailing multiples for the company sit well above fast-casual benchmarks. Monexa reports a trailing P/E in the high 60s to low 70s (~68.76–70.45x) and an EV/EBITDA ≈ 75.04x, signaling investors are paying today for materially higher future cash flows. (Source: Monexa AI
By contrast, long-tenured comps such as CMG trade at materially lower multiples — reflecting a history of margin durability and cash generation. Market sources place Chipotle's P/E and EV/EBITDA in the mid‑30s and mid‑20s respectively, highlighting the valuation gap CAVA must justify through execution. (Sources: Macrotrends — CMG, GuruFocus — CMG EV/EBITDA
| Metric | CAVA | CMG |
|---|---|---|
| P/E (TTM) | 68.76x – 70.45x | ~36–40x (range) |
| Price / Sales (TTM) | 9.43x | ~4.8–4.9x |
| EV / EBITDA (TTM) | 75.04x | ~25–29x |
| Source | Monexa AI | Macrotrends / GuruFocus |
Financial performance and unit economics#
CAVA's FY2024 results show a meaningful inflection in profitability: Revenue $963.71M, Net Income $130.32M, and a reported gross profit $241.81M for the year. The company reported an operating income of $43.12M in FY2024. These figures represent a sharp improvement versus FY2023 and support the narrative that scale is beginning to flow through to the P&L. (Source: Monexa AI
On margins, Monexa lists FY2024 gross profit ratio at 25.09% and net income margin at +13.52%. Note: some market commentary cites higher restaurant-level gross margins (a potential difference in metric definitions); the primary financial statements from Monexa should be treated as the standard for cross-period comparisons. (Source: Monexa AI
Liquidity and cash generation improved materially in 2024: cash & short‑term investments $366.12M, net cash from operations $161.03M, and free cash flow $52.90M. At the same time, long-term debt sits at $341.47M, producing a modest net debt ~$12.59M, signaling a relatively conservative net leverage posture as expansion continues. (Source: Monexa AI
| FY | Revenue | Gross Profit | Operating Income | Net Income | EPS (TTM) |
|---|---|---|---|---|---|
| 2024 | $963.71M | $241.81M | $43.12M | $130.32M | $1.23 (TTM) |
| 2023 | $728.70M | $180.35M | $4.72M | $13.28M | — |
| Source | Monexa AI |
Analyst estimates, risks and strategic implications#
Consensus and sell‑side dynamics are mixed: Monexa lists forward revenue and EPS trajectories that imply continued high growth (e.g., estimated revenue $1.19B and estimated EPS $0.5865 for FY2025 in aggregate analyst models). These forecasts embed continued unit openings and gradual margin recovery, not a near‑term leap to peer margins. (Source: Monexa AI
Forward valuation metrics in Monexa's dataset are aggressive — e.g., forward P/E of 146.14x for 2025 falling to 45.65x by 2029 — implying the market is pricing significant EPS growth several years out. That path depends on: (1) preserving AUVs as new stores open, (2) reducing pre‑opening cost per unit, and (3) moderating food and labor inflation. (Source: Monexa AI
Operationally, 2024 capex was -$108.13M, with pre‑opening and infrastructure spend highlighted as a drag on short-term margins. Continued heavy reinvestment will restrain near‑term EPS even as unit economics are expected to improve over time once cohorts mature. Investors should weigh the speed of openings against the evidence of consistent cohort margins post‑ramp. (Source: Monexa AI
| Year | Est. Revenue | Est. EPS | # Analysts (rev/eps) |
|---|---|---|---|
| 2025 | $1,190,143,871 | $0.5865 | 12 / 8 |
| 2026 | $1,444,123,735 | $0.70966 | 12 / 11 |
| 2027 | $1,776,614,055 | $0.98130 | 9 / 6 |
| 2028 | $2,153,000,000 | $1.41650 | 7 / 5 |
| 2029 | $2,491,750,000 | $1.81095 | 4 / 2 |
| Source | Monexa AI |
Key takeaways & what this means for investors#
CAVA demonstrates a textbook growth‑at‑a‑price profile: strong revenue acceleration (+32.25% revenue growth TTM) and improving GAAP profit, balanced against very high multiples and near‑term margin risk from pre‑opening and input costs. (Source: Monexa AI
- Market pricing: Premium multiples (P/E ~68.76–70.45x, EV/EBITDA ~75.04x) imply high execution expectations. (Source: Monexa AI
- Profitability inflection: FY2024 GAAP net income $130.32M shows meaningful progress vs FY2023. (Source: Monexa AI
- Balance sheet & cash flow: $366.12M cash and net debt ~$12.59M provide flexibility for openings and systems investment. (Source: Monexa AI
- Key catalysts to monitor: Q2 EPS/revenue vs consensus, AUV and same‑store commentary, pre‑opening spend per unit, and guidance on cadence of openings. (Sources: CAVA IR, Monexa AI
Taken together, the data support a narrowed focus for active investors: measure conviction on management's ability to sustain AUVs and demonstrate consistent cohort-level margin improvement. Short-term price action will be driven by the Q2 print and the detail around pre‑opening costs; medium‑term valuation relief requires visible margin leverage and stable AUV trends. (Source: Monexa AI