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On Wednesday, Citi analysts adjusted their financial outlook for CAVA Group Inc (NYSE:CAVA), lowering the price target to $114 from the previous $120 while sustaining a Neutral rating on the stock. Currently trading at $93.32 with a market capitalization of $10.79 billion, CAVA has demonstrated strong revenue growth of 32.25% over the last twelve months. The revision comes ahead of the company’s first-quarter earnings call scheduled for May 15, after market close, with a follow-up call at 5 PM ET.According to InvestingPro analysis, CAVA currently appears overvalued compared to its Fair Value estimate, though the company maintains a GREAT financial health score of 3.01.
The analyst provided a series of focal points for the upcoming earnings call, including inquiries about the performance of CAVA’s revamped loyalty program and its impact on customer engagement. The analyst also seeks clarity on how the new labor model affected productivity, particularly during peak hours, and whether the brand has identified areas of unmet demand. With a P/E ratio of 84.69 and an EV/EBITDA multiple of 98.98, investors will be particularly focused on how these operational improvements justify the company’s premium valuation.Discover 16 additional key insights about CAVA with an InvestingPro subscription, including detailed analysis of its growth prospects and valuation metrics.
Further topics of interest for investors include updates on operational initiatives such as AI make-line monitoring, Project Soul, and the new Kitchen Display System (KDS) being tested in 25 units. There’s also curiosity about the financial impact of tariffs on profit and loss or building and equipment costs, and what to expect from new product launches throughout the remainder of 2025.
Recent data indicates a slight pullback in foot traffic growth in the quarter compared to the previous one, with January showing the strongest increase. Additionally, app usage data suggests a gradual uptick, with recent weeks maintaining near peak levels. Sales and traffic data from Bloomberg have also shown a slowdown, yet the new guest mix has remained consistent with the previous quarter. The company maintains strong operational efficiency with a current ratio of 2.97, indicating robust liquidity to support its growth initiatives.
The firm has also noted that CAVA opened 14 new units in the quarter, surpassing the Street’s expectation of 13. Based on these factors, Citi has revised its earnings per share (EPS) estimates for 2025 and 2026 to $0.46 and $0.63, respectively, up from the prior $0.37 and $0.53. The new price target reflects a 60x EV/EBITDA multiple applied to the firm’s next twelve months EBITDA estimate, which is approximately 4.1 times the market multiple, adjusted down from the previous 4.6 times to account for the current uncertain environment in the restaurant industry.Access CAVA’s comprehensive Pro Research Report and detailed financial metrics through InvestingPro, part of our coverage of 1,400+ top US stocks.
In other recent news, CAVA Group Inc. has been the focus of several analyst updates and market developments. Bernstein has upgraded CAVA’s stock rating from Market Perform to Outperform, maintaining a price target of $115, citing an attractive entry point for investors ahead of the company’s first-quarter earnings. Meanwhile, TD Cowen has adjusted its price target for CAVA to $120 from $130, while retaining a Buy rating, reflecting a broader market pullback in valuations. BofA Securities has initiated coverage on CAVA with a Buy rating and a price target of $112, highlighting the company’s strong business model and growth potential.
Additionally, CAVA Group is set to join the S&P MidCap 400, replacing Altair Engineering, following Altair’s acquisition by Siemens AG (OTC:SIEGY). This inclusion is expected to increase CAVA’s visibility and potentially attract more investor interest. Stifel analysts have expressed caution regarding US restaurant stocks, citing potential downside risks amidst economic uncertainty. However, they identified CAVA as one of the companies with robust sales momentum, suggesting resilience in challenging economic times. These recent developments showcase a mix of analyst optimism and strategic positioning for CAVA Group in the market.
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