CAVA Group stock price has soared: more upside?

CAVA Group (CAVA) stock price is firing on all cylinders, making it one of the best-performing companies in the US. It has jumped by over 194% this year, beating Nvidia and MicroStrategy, which have risen by 152% and 180% this year. 

CAVA Group is a restaurant disruptor

CAVA Group was largely unknown a few years ago. It is now a fast-growing restaurant chain aiming to replicate Chipotle Mexican Grill’s success. 

CAVA hopes to do that by focusing on the Mediterranean food industry, which is increasingly popular in the United States. 

Its revenue has done well in the past few years, growing from $500 million in 2021 to over $845 million in the trailing twelve months.

This growth happened as the company boosted its investments in store openings in the country. For example, it increased the number of stores by 18 in the second quarter. Compared to other companies, it is growing its store counts without incurring substantial losses.

The most recent quarterly results showed that CAVA’s business was doing well. Revenue rose by 35.2% to $231.4 million, which was also higher than the $171 million it made in the first quarter. This means that its growth is accelerating.

The results also revealed that its same-restaurant sales growth was 14.4%, higher than other similar companies.

Most importantly, like Chipotle, CAVA Group is also seeing more online sales as more Americans embrace platforms like Uber Eats, Grubhub, and DoorDash. Its digital revenue mix was 35.8%.

CAVA Group is also making profits during its growth phase. Its net income in the last quarter was $19.7 million, a figure that was higher than the $13.3 million it made in the whole of 2023.

Read more: Cava Group stock price analysis: is this the next Chipotle?

Growth to continue

Analysts believe that CAVA Group has more room to grow in the coming years. Besides, the company has just 341 stores in the United States. In contrast, Chipotle has over 3,495 stores in the country. McDonald’s has over 14,000 people in the country, while Chick-fil-A has over 3,000. Starbucks has 6,500 stores in the US.

These numbers mean that CAVA has yet to scratch the surface in its growth path in the US alone. 

Some analysts believe that one approach would be for CAVA to franchise its business, a move that will help it grow faster. 

Focusing on this model has enabled most restaurants to become giants. Some notable ones are McDonald’s, Starbucks, Chick-fil-A, and Taco Bell.

The franchising model benefits franchisees by allowing them to grow their businesses and receive regular fees. Still, it is unclear whether CAVA Group will embrace this model in the future. Instead, it may decide to follow Chipotle’s business model of building self-operated stores.

Read more: Here’s why CAVA Group stock price is going vertical

Valuation concerns remain

A key challenge for CAVA Group is that it has become one of the most expensive companies in the industry, a premium that has come because of the comparison with Chipotle, a company that also has substantial valuation metrics. 

CAVA Group has a market cap of over $14 billion, which is substantial for a company that is expected to make $935 million this year and $1.13 billion next year. The figure means that CAVA has a price-to-sales ratio of 16, higher than other companies like Domino’s, Wingstop, and Chipotle.

CAVA’s valuation means that Wall Street values its restaurants at over $41 million each. On the other hand, each of Chipotle’s store is valued at about $20 million while McDonald’s stores are valued at over $5.6 million. 

Therefore, these numbers mean that the management will need to continue executing well to justify the valuation. 

The next key catalyst will happen on November 22, when it publishes its financial results. Analysts expect the numbers to reveal that its revenue rose to $231 million while its annual revenue jumped by 32% to $231 million in the last quarter. 

CAVA Group stock analysis

The daily chart shows that the CAVA share price has done well in the past few months. It has soared from last year’s low of $28.85 to the current $126. It has remained above all moving averages while oscillators have continued pointing upwards. 

Therefore, the stock will likely continue rising, a move that will be confirmed if it rises above the all-time high of $131.58. If that happens, the next point to watch will be at $150.

What is clear, however, is that CAVA’s stock growth will not be linear, meaning that it may see some short-term volatility. For example, Chipotle’s stock retreated by over 40% between September 2021 and June 2022. Before that, it fell by 67% from its August 2025 to its lowest level in 2018 amid the e-coli crisis. Therefore, a pullback cannot be ruled out in the coming months or years.

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