Melius Research has commenced analysis of Cava Group (CAVA, Financial), assigning the stock a Hold rating. The firm has set a price target of $95 for CAVA, suggesting a cautious approach to investing in this stock.
Wall Street Analysts Forecast
Based on the one-year price targets offered by 14 analysts, the average target price for Cava Group Inc (CAVA, Financial) is $112.09 with a high estimate of $125.00 and a low estimate of $90.00. The average target implies an upside of 21.77% from the current price of $92.05. More detailed estimate data can be found on the Cava Group Inc (CAVA) Forecast page.
Based on the consensus recommendation from 19 brokerage firms, Cava Group Inc's (CAVA, Financial) average brokerage recommendation is currently 1.9, indicating "Outperform" status. The rating scale ranges from 1 to 5, where 1 signifies Strong Buy, and 5 denotes Sell.
CAVA Key Business Developments
Release Date: May 15, 2025
- Revenue: Increased 28.2% year over year to $328.5 million.
- Same Restaurant Sales Growth: Increased 10.8%, driven by 7.5% traffic growth.
- Net New Restaurants: Opened 15 net new restaurants, totaling 382 locations, an 18.3% increase year over year.
- Adjusted EBITDA: $44.9 million, a 34.6% increase over the first quarter of 2024.
- Net Income: $25.7 million, an 83.7% increase over the first quarter of 2024.
- Free Cash Flow: $2.7 million.
- Restaurant Level Profit: $82.3 million or 25.1% of revenue, a 27.4% increase from the first quarter of 2024.
- Food, Beverage, and Packaging Costs: 29.3% of revenue, up 110 basis points due to steak impact.
- Labor and Related Costs: 25.7% of revenue, a decrease of 30 basis points from the first quarter of 2024.
- Occupancy and Related Expenses: 7.4% of revenue, an improvement of 60 basis points from the first quarter of 2024.
- General and Administrative Expenses: 10.5% of revenue, a 60-basis-point improvement from the first quarter of 2024.
- Cash and Investments: $369.4 million with zero debt outstanding.
- Full Year 2025 Outlook: 64 to 68 net new restaurant openings; same restaurant sales growth of 6% to 8%; restaurant level profit margin between 24.8% and 25.2%.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Cava Group Inc (CAVA, Financial) reported a 28.2% increase in revenue for the first quarter of 2025.
- Same restaurant sales grew by 10.8%, driven by a 7.5% increase in traffic.
- The company opened 15 net new restaurants, expanding its footprint to 382 locations, an 18.3% increase year over year.
- Adjusted EBITDA increased by 34.6% to $44.9 million compared to the first quarter of 2024.
- Cava Group Inc (CAVA) surpassed $1 billion in revenue on a trailing 12-month basis, highlighting its leadership in the Mediterranean cuisine category.
Negative Points
- Food, beverage, and packaging costs increased by 110 basis points due to the impact of steak, affecting overall profit margins.
- Despite strong growth, the company faces ongoing macroeconomic uncertainties that could impact future performance.
- Labor and related costs remain a significant expense, although they decreased slightly as a percentage of revenue.
- Pre-opening expenses increased to $4.5 million, reflecting higher costs associated with new restaurant openings in higher rent areas.
- The company anticipates potential challenges in maintaining the same restaurant sales growth rate due to lapping previous year's steak offerings.
