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CAVA Group, Inc. (CAVA)
:CAVA
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CAVA Group, Inc.
(NYSE:CAVA)
69Neutral
Positive Factors
Financial Performance
CAVA's fourth quarter beat top- and bottom-line expectations, highlighted by a 21.2% comp gain and a 60% increase in adjusted EBITDA.
Market Position
CAVA is the number one market share leader in the emerging Fast Casual Mediterranean category.
Store Productivity
New store productivity has surpassed initial expectations, showing confidence in raised targets for future openings.
Negative Factors
Cost Pressures
Margins were impacted by higher costs of goods sold and operational expenses, missing consensus expectations.
Earnings Volatility
Macroeconomic pressures on consumer spending, inflation, and the owner-operator model may cause earnings volatility.
Guidance Concerns
FY25 guidance overall is a bit below Street on RLM and EBITDA, and below SSS at the midpoint.
CAVA Group, Inc. (CAVA) vs. S&P 500 (SPY)
Market Cap
$10.44B
Dividend YieldN/A
Average Volume (3M)3.88M
Price to Earnings (P/E)82.1
Beta (1Y)2.41
Revenue Growth32.25%
EPS Growth873.48%
CountryUS
Employees10,300
SectorConsumer Cyclical
Sector Strength48
IndustryRestaurants
Share Statistics
EPS (TTM)1.10
Shares Outstanding115,594,580
10 Day Avg. Volume3,740,716
30 Day Avg. Volume3,875,306
Financial Highlights & Ratios
PEG Ratio0.09
Price to Book (P/B)N/A
Price to Sales (P/S)10.06
Price to Cash Flow (P/CF)81.20
P/FCF Ratio81.20
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
$130.77Price Target Upside55.96% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering14
CAVA Group, Inc. Business Overview & Revenue Model
Company DescriptionCAVA Group, Inc. (CAVA) is a leading American restaurant company specializing in Mediterranean cuisine. It operates a fast-casual restaurant chain known for its customizable bowls, salads, and pitas that emphasize fresh ingredients and bold flavors. CAVA's offerings cater to health-conscious consumers seeking nutritious and flavorful meal options, and the company positions itself within the growing fast-casual dining sector.
How the Company Makes MoneyCAVA Group, Inc. primarily generates revenue through the sale of food and beverages at its fast-casual restaurant locations. The company's core revenue stream is its in-store dining and takeout offerings, which include customizable Mediterranean dishes. CAVA also leverages digital sales through its mobile app and website, capitalizing on the trend towards online ordering and delivery services. Additionally, CAVA may benefit from strategic partnerships and collaborations that enhance its brand visibility and market reach. Its focus on fresh, health-oriented meals aligns with consumer preferences, contributing to its overall earnings.
CAVA Group, Inc. Financial Statement Overview
Summary
CAVA Group, Inc. exhibits strong financial health with substantial revenue growth, improved profitability, and a solid balance sheet. The company's ability to generate cash flow supports its expansion and investment strategies. While there are areas for operational improvement, particularly in EBIT margins, the overall financial outlook is positive, supported by effective leverage management and cash flow generation.Income Statement
CAVA Group, Inc. has demonstrated a robust revenue growth trajectory, with a significant increase in total revenue from $500.1M in 2021 to $963.7M in 2024. Gross profit margin improved substantially, reflecting enhanced operational efficiency. The net profit margin also turned positive, indicating effective cost management and improved profitability. However, the EBIT margin remains relatively modest, suggesting potential for further operational improvements.85
Very Positive
Balance Sheet
The company's balance sheet shows a strong equity position with a rising stockholders' equity to total assets ratio. The debt-to-equity ratio is manageable, highlighting a balanced approach to leverage. However, total debt has increased, which could pose future risks if not managed carefully. The increase in cash and short-term investments provides a cushion for financial stability.78
Positive
Cash Flow
CAVA's operating cash flow has witnessed impressive growth, supporting a positive free cash flow in the latest period. The operating cash flow to net income ratio indicates effective cash conversion from profits. Despite substantial capital expenditures, the company has maintained positive free cash flow growth, reflecting disciplined financial management.82
Very Positive
| Breakdown | |||
| Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 |
|---|---|---|---|
| Income Statement | Total Revenue | ||
| 963.71M | 728.70M | 564.12M | 500.07M | Gross Profit |
| 646.37M | 180.35M | 55.26M | 37.62M | EBIT |
| 43.12M | 4.72M | -14.78M | -27.18M | EBITDA |
| 103.79M | 78.86M | -16.12M | 12.07M | Net Income Common Stockholders |
| 130.32M | 13.28M | -58.99M | -37.39M |
| Balance Sheet | Cash, Cash Equivalents and Short-Term Investments | ||
| 366.12M | 332.43M | 39.13M | 140.33M | Total Assets |
| 1.17B | 983.76M | 654.43M | 362.83M | Total Debt |
| 378.71M | 336.20M | 314.73M | 15.34M | Net Debt |
| 12.59M | 3.77M | 275.61M | -124.99M | Total Liabilities |
| 474.10M | 412.95M | 440.63M | 93.55M | Stockholders Equity |
| 695.57M | 570.80M | 213.81M | 269.29M |
| Cash Flow | Free Cash Flow | ||
| 52.90M | -41.70M | -98.28M | -53.02M | Operating Cash Flow |
| 161.03M | 97.10M | 6.04M | 3.39M | Investing Cash Flow |
| -108.13M | -138.81M | -104.16M | -56.31M | Financing Cash Flow |
| -19.20M | 335.01M | -3.08M | 143.15M |
CAVA Group, Inc. Technical Analysis
Neutral
83.85
Price Trends
109.82
Negative
120.95
Negative
113.28
Negative
Market Momentum
-8.10
Negative
46.86
Neutral
87.07
Negative
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For CAVA, the sentiment is Neutral. The current price of 83.85 is below the 20-day moving average (MA) of 85.02, below the 50-day MA of 109.82, and below the 200-day MA of 113.28, indicating a neutral trend. The MACD of -8.10 indicates Negative momentum. The RSI at 46.86 is Neutral, neither overbought nor oversold. The STOCH value of 87.07 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Neutral 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 (59)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
77 Outperform | $65.77B | 44.52 | 45.67% | ― | 14.61% | 25.68% | |
77 Outperform | $901.20M | 27.85 | 8.16% | ― | 4.51% | 43.99% | |
69 Neutral | $10.44B | 82.09 | 20.58% | ― | 32.25% | 873.48% | |
68 Neutral | $3.86B | 385.47 | 2.23% | ― | 15.18% | -48.78% | |
61 Neutral | $6.18B | 58.23 | -16.09% | 0.45% | 36.03% | 57.51% | |
59 Neutral | $12.50B | 11.24 | 1.20% | 3.72% | 1.27% | -20.93% | |
42 Neutral | $50.77M | ― | -335.60% | ― | -2.01% | -267.04% |
* Consumer Cyclical Sector Average
Performance Comparison
CAVA
CAVA Group, Inc.
90.33
22.08
32.35%
CMG
Chipotle
49.60
-8.47
-14.59%
NDLS
Noodles & Co
1.14
-0.71
-38.38%
SHAK
Shake Shack
95.48
-7.34
-7.14%
WING
Wingstop
222.62
-137.41
-38.17%
PTLO
Portillo's
12.75
-0.40
-3.04%
CAVA Group, Inc. Earnings Call Summary
Earnings Call Date: Feb 25, 2025 | % Change Since: -15.56% | Next Earnings Date: Jun 3, 2025
Earnings Call Sentiment Positive
CAVA delivered exceptional financial results in 2024, with significant revenue and same-store sales growth, successful market expansions, and strong financial positioning. Despite some cost pressures and moderation in anticipated growth for 2025, the company's strategic initiatives, technological advancements, and culinary innovations position it well for continued success.Highlights
Record-Breaking Revenue and Growth
CAVA reported a 36.8% increase in revenue for Q4 2024 and a 35% increase for the full year, excluding the 53rd week in 2023. This demonstrates strong growth in the Mediterranean cuisine category.
Strong Same-Store Sales and Traffic Growth
CAVA achieved a 21.2% increase in same-restaurant sales for Q4 2024, with a notable 15.6% increase in traffic. Full-year same-restaurant sales growth was 13.4% with an 8.7% traffic increase.
Expansion and New Market Success
CAVA opened 58 net new restaurants in 2024, expanding to 25 states and the District of Columbia, including successful entries into Chicago, Detroit, and Indianapolis.
Improvement in Adjusted EBITDA
Adjusted EBITDA increased by 60% to $25.1 million in Q4 2024 and 71% to $126.2 million for the full year, reflecting strong operational performance.
Innovative Culinary Developments
CAVA introduced new menu items such as grilled steak and garlic ranch pita chips, which have been well-received, driving increased customer engagement and sales.
Technological Advancements
CAVA's Connected Kitchen initiative progressed with AI video technology and a new kitchen display system, enhancing order accuracy and productivity.
Strong Financial Position
CAVA ended the year with $366.1 million in cash, zero debt, and access to a $75 million undrawn revolver, positioning the company well for future investments.
Lowlights
Increased Food and Packaging Costs
CAVA's food, beverage, and packaging costs rose to 29.9% of revenue, a 110 basis point increase, due to the national rollout of steak and wage investments.
Impact of Steak Launch on Margins
The introduction of steak in mid-2024 led to a more significant impact on Q4 margins than anticipated, with expected roll-off by summer 2025.
Moderation in Same-Store Sales Growth
CAVA's guidance for 2025 projects same-restaurant sales growth of 6% to 8%, a moderation from 2024 levels, with anticipated lower growth in the latter half of the year.
Company Guidance
During the CAVA Fourth Quarter 2024 Earnings Conference Call, the company provided detailed guidance and insights into its financial performance. CAVA reported a 36.8% increase in revenue for the fourth quarter, excluding the 53rd week in 2023, and a 21.2% growth in same-restaurant sales, driven by a 15.6% increase in traffic. The company ended the year with 367 restaurants, marking a net increase of 15 new openings and an 18.8% year-over-year growth. Adjusted EBITDA reached $25.1 million, a 60% increase from the prior year, while net income was reported at $78.6 million and adjusted net income at $6.5 million, reflecting a 216% rise compared to the fourth quarter of 2023. For the full year, CAVA achieved a 35% revenue increase, opened 58 net new restaurants, and delivered an adjusted EBITDA of $126.2 million, a 71% increase over the previous year. Looking ahead, CAVA plans to open 62 to 66 new restaurants in 2025, with a same-restaurant sales growth target of 6% to 8%, and aims to expand its presence in markets such as South Florida, Detroit, and Indianapolis. The company also highlighted its new loyalty program, which has led to a 230 basis point increase in loyalty sales, and its ongoing investments in technology, including a Kitchen Display System (KDS) set to expand to 250 restaurants by the end of 2025.Glossary
OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.
NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.
UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.
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.