CAVA Group, Inc. Just Beat EPS By 42%: Here's What Analysts Think Will Happen Next

A week ago, CAVA Group, Inc. (NYSE:CAVA) came out with a strong set of third-quarter numbers that could potentially lead to a re-rate of the stock. The company beat forecasts, with revenue of US$244m, some 4.6% above estimates, and statutory earnings per share (EPS) coming in at US$0.16, 42% ahead of expectations. Earnings are an important time for investors, as they can track a company's performance, look at what the analysts are forecasting for next year, and see if there's been a change in sentiment towards the company. So we gathered the latest post-earnings forecasts to see what estimates suggest is in store for next year.

See our latest analysis for CAVA Group

After the latest results, the 13 analysts covering CAVA Group are now predicting revenues of US$1.19b in 2025. If met, this would reflect a huge 30% improvement in revenue compared to the last 12 months. Per-share earnings are expected to jump 30% to US$0.61. Yet prior to the latest earnings, the analysts had been anticipated revenues of US$1.14b and earnings per share (EPS) of US$0.53 in 2025. There's been a pretty noticeable increase in sentiment, with the analysts upgrading revenues and making a decent improvement in earnings per share in particular.

With these upgrades, we're not surprised to see that the analysts have lifted their price target 27% to US$157per share. That's not the only conclusion we can draw from this data however, as some investors also like to consider the spread in estimates when evaluating analyst price targets. Currently, the most bullish analyst values CAVA Group at US$195 per share, while the most bearish prices it at US$110. These price targets show that analysts do have some differing views on the business, but the estimates do not vary enough to suggest to us that some are betting on wild success or utter failure.

Looking at the bigger picture now, one of the ways we can make sense of these forecasts is to see how they measure up against both past performance and industry growth estimates. We can infer from the latest estimates that forecasts expect a continuation of CAVA Group'shistorical trends, as the 23% annualised revenue growth to the end of 2025 is roughly in line with the 22% annual growth over the past three years. By contrast, our data suggests that other companies (with analyst coverage) in a similar industry are forecast to see their revenues grow 9.8% per year. So although CAVA Group is expected to maintain its revenue growth rate, it's definitely expected to grow faster than the wider industry.

The Bottom Line

The most important thing here is that the analysts upgraded their earnings per share estimates, suggesting that there has been a clear increase in optimism towards CAVA Group following these results. Pleasantly, they also upgraded their revenue estimates, and their forecasts suggest the business is expected to grow faster than the wider industry. There was also a nice increase in the price target, with the analysts clearly feeling that the intrinsic value of the business is improving.

With that in mind, we wouldn't be too quick to come to a conclusion on CAVA Group. Long-term earnings power is much more important than next year's profits. We have estimates - from multiple CAVA Group analysts - going out to 2026, and you can see them free on our platform here.

You should always think about risks though. Case in point, we've spotted 1 warning sign for CAVA Group you should be aware of.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.