CAVA Stock: Should You Invest In CAVA Group Today?
2023年8月24日 - 7:23PM
Finscreener.org
CAVA Group (NYSE:
CAVA) went public via an
IPO in June 2023. Its shares were priced at $22 and are currently
trading at $42.44, almost doubling investor wealth. CAVA stock
touched a record high of $53.5 earlier this month and is currently
valued at a market cap of $4.8 billion.
Let’s see if you should invest in
Cava Group right now.
Is CAVA stock a good buy today?
CAVA is a fast-casual restaurant
brand that operates in the Mediterranean food category. It reported
sales of $500 million in 2021 and $564 million in 2022. In the last
two years, the company’s operating losses
totaled around $70 million.
However, in Q2 of 2023, Cava
reported revenue of $172.9 million and a net income of $6.5 million
or $0.21 per share. Comparatively, analysts forecast CAVA to report
revenue of $163 million and a loss of $0.02 per share in the June
quarter. CAVA reported a loss of $8.2 million or $6.23 per share in
the year-ago period.
Due to its earnings and revenue
beat, CAVA stock surged over 12% in extending trading soon after it
released Q2 results.
Net sales soared 62% year over
year due to new restaurant openings. It opened 16 new Cava
restaurants in Q2, bringing the total to 279 outlets. The company’s
same-store sales were up 18.2% in Q2 as customer traffic was up
10.3%, suggesting Cava is an outlier in the restaurant industry as
footfalls have generally shrunk in recent months.
According to its CFO, Tricia
Tolivar, the chain’s strong customer traffic trends can be
attributed to increased brand awareness following its blockbuster
IPO. Alternatively, Tolivar emphasized that same-store sales growth
has moderated in recent weeks, suggesting customer spending has
pulled back in line with broader market trends.
What impacted Cava’s results in Q2 of 2023?
To offset elevated inflation
levels, Cava increased menu prices by 8% year over year. Cava also
stated it has no plans to raise prices in the near future. Around
33% of its sales in Q2 originated from digital orders, which
further boosted profit margins.
The rise in customer footfall
allowed Cava to report robust restaurant-level profitability. In
Q2, this metric improved to 26.1%, up from 25.4% in Q1.
Restaurants have certain fixed
expenses, such as rent, utilities, and employee wages which need to
be paid each month. In case the restaurant is busy, it benefits
from higher operating leverage, further boosting the bottom
line.
This is what happened to Cava in
Q2. While sales grew significantly, Cava reported record profits in
the quarter.
What next for Cava stock price and
investors?
Cava expects same-store sales to
grow between 13% and 15% in 2023, which means this metric will
decelerate in the second half of this year. Analysts expect Cava
sales to surge to $720 million in 2023 and to $843 million in
2024.
So, Cava stock is priced at 6.7
times forward sales, which is not too steep for a growth stock with
widening profit margins.
But Cava remains vulnerable to
rising interest rates, gas prices, and other broader economic
pressures resulting in a cautious sales forecast.
The company plans to open between
65 to 70 new locations in 2023 and forecasts adjusted EBITDA
(earnings before interest, tax, depreciation, and amortization)
between $62 million and $67 million this year.
Analysts remain bullish on CAVA
stock and expect it to gain 20% in the next 12 months.
CAVA (NYSE:CAVA)
過去 株価チャート
から 5 2024 まで 6 2024
CAVA (NYSE:CAVA)
過去 株価チャート
から 6 2023 まで 6 2024