AnalystConsensusTarget updated the narrative for CAVA

CAVA Group's analyst price target has been modestly reduced by analysts, falling from about $92.21 to $90.73 per share. Recent research highlights near-term sales pressures and a softer growth outlook, but notes that core fundamentals remain intact.

Analyst Commentary

Analyst sentiment on CAVA Group remains mixed following the company's recent earnings report and a wave of price target revisions. While some remain optimistic about the brand's core strengths and long-term opportunity, others are sounding a note of caution due to the near-term headwinds and more modest growth expectations.

Bullish Takeaways

• Bullish analysts view the recent share price pullback as a buying opportunity, considering the fundamental long-term outlook for CAVA remains intact.
• Despite a miss on same-store sales growth, the company continues to outperform on EBITDA, and new stores are ramping quickly, supporting ongoing expansion initiatives.
• There is confidence that recent softness in comp sales is largely attributable to broader macroeconomic factors and challenging comparisons, rather than structural brand weaknesses.
• Some see the recalibration of growth estimates as realistic, with expectations for sales trends to normalize and return to healthier levels in upcoming quarters.

Bearish Takeaways

• Bearish analysts highlight recent reductions in same-store sales guidance and softer top-line momentum as concerning, particularly in light of CAVA’s premium valuation.
• Concerns have been raised about the negative impact of newer stores entering the comp base. This dynamic could weigh on near-term growth rates and pressure the share price.
• Further adjustments to long-term models have been made to reflect ongoing sales misses and updated guidance, indicating caution around the pace of future growth.
• With shares down significantly year-to-date, there is recognition that bad news may be priced in. However, execution risk is elevated given revised expectations.

What's in the News

• CAVA opened its first Miami location in Brickell, expanding its South Florida presence. The company held a Community Day that raised funds for Good Neighbors Florida. (Key Developments)
• The company recently opened its 400th restaurant, reaching a national footprint in 28 states and the District of Columbia, with a goal of 1,000 locations by 2032. (Key Developments)
• CAVA entered the Detroit market with its second Michigan restaurant and supported Food Rescue US – Detroit during its Community Day event. (Key Developments)
• Full year 2025 earnings guidance was lowered, with same-restaurant sales growth now expected at 4.0% to 6.0%, down from previous guidance of 6.0% to 8.0%. (Key Developments)
• The launch of a new Hot Harissa Meal features limited-edition pita chip plushies available exclusively in restaurants. (Key Developments)

Valuation Changes

• Consensus Analyst Price Target has fallen modestly, moving from $92.21 to $90.73 per share.
• Discount Rate has edged down slightly, from 8.52% to 8.44%.
• Revenue Growth projections have increased marginally, from 20.41% to 20.87%.
• Net Profit Margin estimates have improved slightly, rising from 6.67% to 6.69%.
• Future P/E ratio has decreased, shifting from 112.05x to 108.44x.