Shares of the Mediterranean restaurant chain Cava (NYSE:CAVA) closed 99% higher in their stock market debut. The stellar performance of CAVA stock shows that investors are again showing interest in the IPO market.
What is the Revenue of the Cava Company?
The company’s business is growing rapidly, benefitting from an expanding restaurant base, higher average guest checks, and multi-channel offerings. The number of CAVA restaurants has grown at a CAGR of 49% since 2016. At the same time, its top line increased at a CAGR of 52%.
It delivered total revenue of $564.1 million in Fiscal 2022. Meanwhile, its total revenue increased by 28% in Q1 of 2023. CAVA same-restaurant sales increased by 14.2% in Fiscal 2022 and by 28.4% in the first quarter of 2023.
Cava Stock Lifts Hope for the IPO Market
It’s worth highlighting that 2022 wasn’t a great year for the equity market as economic uncertainty, higher interest rates, and the fear of recession adversely impacted investors’ risk appetite. Given the elevated volatility, IPO activities slumped as most flopped.
A recent report from EY about global IPO trends revealed that companies continue to hold back on their IPOs due to macro uncertainty. The report shows that global IPO volumes fell 8% year-over-year in the first quarter of 2023.
As market conditions remain challenging, the stellar performance of CAVA stock came as a positive surprise.
While CAVA’s top line is growing, it is not yet profitable. Thus, whether Cava will become the next Chipotle Mexican Grill (NYSE:CMG) or its stock will slide like Sweetgreen (NYSE:SG) following the stellar IPO remains a wait-and-watch story. Meanwhile, Cava’s success could drive more companies to come out with their IPOs, and investors can track them via TipRanks’ IPO Calendar.
Investors should note that Chipotle stock sports a Strong Buy consensus rating on TipRanks, while analysts are cautiously optimistic about SG stock.
