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On Monday, Loop Capital maintained a Hold rating on CAVA Group Inc (NYSE:CAVA) with a steady price target of $100.00. The firm’s analyst noted CAVA’s strong first-quarter performance, which surpassed both their own and the consensus estimates. CAVA Group reported an adjusted EBITDA of $44.9 million for the first quarter of 2025, which is a significant increase from the $33.3 million reported in the same period last year. This figure also exceeded Loop Capital’s projection of $40.8 million and the consensus estimate of $43.9 million. According to InvestingPro data, CAVA currently trades at an EV/EBITDA multiple of 103x, suggesting a premium valuation compared to peers.
CAVA’s adjusted earnings per share (EPS) for the quarter came in at $0.22, which was favorable compared to Loop Capital’s forecast of $0.17 and the consensus estimate of $0.14. The company’s comparable sales growth was notable, registering a 10.8% increase, which included a 3.3% rise in ticket prices and 7.5% growth in traffic. These figures surpassed the expected 10.0% growth in comparable sales. InvestingPro analysis shows the company has achieved impressive revenue growth of 32.25% over the last twelve months, with 14 additional key insights available to subscribers.
The company’s consolidated revenues for the first quarter stood at $329 million, marking a 28% year-over-year increase. This revenue performance was higher than Loop Capital’s estimate of $307 million and the consensus estimate of $327 million. Despite the strong financial results, Loop Capital has decided to maintain its Hold rating and price target of $100 on CAVA stock, which is based on approximately 75 times their 2025 estimated EV/EBITDA. Based on InvestingPro Fair Value calculations, CAVA appears overvalued at its current market capitalization of $11.2 billion and P/E ratio of 88x, despite maintaining strong profitability metrics.
In other recent news, CAVA Group Inc. has reported impressive financial results for the first quarter of 2025, significantly surpassing earnings expectations. The company posted an earnings per share (EPS) of $0.22, far exceeding the forecasted $0.02, alongside revenue of $331.83 million, which also beat the anticipated $280.93 million. CAVA’s comparable store sales saw a growth of 10.8%, and adjusted EBITDA reached $44.9 million, outpacing both Stifel’s and the Street’s estimates. The company has confirmed its full-year guidance for comparable sales, projecting an increase of 6-8%, and plans to open 64-68 new restaurants this year.
Analysts have reacted positively to CAVA’s performance. Bernstein maintained an Outperform rating, noting the company’s effective supply chain management and productivity improvements. JPMorgan raised its price target to $115, citing CAVA’s solid first-quarter results and potential for significant expansion in the U.S. Stifel reiterated a Buy rating with a $175 target, highlighting the company’s strong new unit performance and strategic initiatives. Meanwhile, Citi adjusted its price target to $115, maintaining a Neutral stance, and acknowledged the company’s positive results amidst industry challenges.
CAVA’s management has expressed confidence in the company’s growth trajectory, emphasizing their strategic initiatives and robust financial outlook. The company plans to reach 1,000 restaurants by 2032 and continues to focus on enhancing customer engagement through initiatives like a tiered loyalty program. Despite a volatile market environment, CAVA’s recent developments suggest a promising path forward.
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