Updated Aug 11 at 10:20am ET.
Follow CAVA Group to never miss an important update.
CAVA reports its latest quarterly results today. Analysts expect the company to report about 360 million dollars in revenue and earnings of roughly 18 cents per share. While the company has a history of beating these estimates, the numbers themselves are often less important than the details behind them.
For a fast-growing chain like this, the two things that matter most are how many new customers are coming in and whether the profit from each restaurant stays high. We are watching to see if sales growth is coming from more people visiting rather than just higher prices, and if profit margins stay above 23 percent as the company continues its push toward 1,000 locations.
RBC Capital lowered its price target for the restaurant chain to $90. Even with the lower target, the firm still sees the stock as worth more than its current price of about $63.
Analysts use these targets to show what they think a stock will be worth in a year. While the cut reflects a more cautious view, it does not change the fact that the company is still growing its store count quickly and recently reached profitability for the first time.
Source: RBC Capital
The company officially filed notice that Amiee Bayer-Thomas has joined its board of directors. She currently serves as the Chief Retail Officer at Ulta Beauty. Adding a leader with deep experience in running a large network of retail stores is a logical move. The company is trying to more than double its footprint to 1,000 locations by 2032, and her background in managing thousands of beauty stores could help as they scale up their Mediterranean restaurant concept.
Source: 8-K filing
The company announced it will release its second quarter results on August 11. This will be an important check on whether the chain is maintaining its high profit margins as it opens new locations. Investors will be looking closely at two things: whether guest traffic is still the main reason for sales growth and if the average sales per restaurant are staying at or above 3 million dollars. These numbers prove whether the Mediterranean concept is working as well in new markets as it did in its early cities.
Source: Business Wire
Morgan Stanley upgraded the stock to its version of a buy rating. The firm set a price target of $90, suggesting they believe the stock has room to rise from its current level.
This upgrade reflects confidence in the company's ability to replicate the successful growth model used by other major fast-casual chains. The business is currently opening a new restaurant roughly every four days, and this move suggests analysts believe that rapid expansion can continue without hurting the company's profit margins.
Source: Morgan Stanley
Analysts recently adjusted their expectations following a flurry of activity in late May and a series of upgrades throughout the summer. Most analysts rate the stock a buy, and the average target of $93 suggests 51% upside.
The company has beaten analyst profit targets in six of the last eight quarters. This suggests management is disciplined about its costs and conservative with the numbers it shares with the public.
| Expectation | |
|---|---|
| EPS | $0.18 |
| Revenue | $360M |
