We use cookies to understand how you use our site and to improve your experience.
This includes personalizing content and advertising.
By pressing "Accept All" or closing out of this banner, you consent to the use of all cookies and similar technologies and the sharing of information they collect with third parties.
You can reject marketing cookies by pressing "Deny Optional," but we still use essential, performance, and functional cookies.
In addition, whether you "Accept All," Deny Optional," click the X or otherwise continue to use the site, you accept our Privacy Policy and Terms of Service, revised from time to time.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
The Zacks Consensus Estimate for CAVA’s first-quarter earnings per share (EPS) is pegged at 14 cents, suggesting 16.7% growth from 12 cents reported in the prior-year quarter. The consensus mark for earnings has remained unchanged over the past 60 days.
CAVA Earnings Estimate Trend
Image Source: Zacks Investment Research
The consensus mark for first-quarter revenues is pegged at $330.6 million, indicating growth of 27.7% from the year-ago quarter’s reported figure.
CAVA Group has an impressive earnings surprise history. CAVA’s earnings outpaced the Zacks Consensus Estimate in three of the trailing four quarters, and missed on one occasion, with the average surprise being 62.6%. (Find the latest EPS estimates and surprises on Zacks Earnings Calendar.)
CAVA Earnings Surprise History
Image Source: Zacks Investment Research
Q1 Earnings Whispers for CAVA Stock
Our proven model does not conclusively predict an earnings beat for CAVA Group this time around. A stock needs to have a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) to beat on earnings. But that's not the case here. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
CAVA Group has an Earnings ESP of -2.00% and a Zacks Rank #4 (Sell).
CAVA Group’s first-quarter performance is expected to have benefited from strong momentum in traffic growth, strategic expansion efforts, and continued enhancements across its digital and in-restaurant experiences. With a differentiated Mediterranean brand proposition and disciplined execution, the company appears well-positioned to sustain its growth trajectory in the to-be-reported quarter.
Management anticipates that same-restaurant sales growth will be highest in the first quarter before moderating over the remainder of the year, aligning with the company’s full-year guidance of 6-8% growth. A combination of elevated traffic, modest pricing, and increasing customer engagement through digital and loyalty channels is likely to have aided its performance in the to-be-reported quarter.
CAVA’s loyalty program, a key strategic pillar, is likely to have played a meaningful role in boosting engagement and frequency during the quarter. Since its reintroduction, the program has delivered notable increases in sales participation, particularly among lower-frequency users, and enabled targeted behavioral influence through point-based reward redemptions. The success of limited-time incentives tied to new menu items, such as the garlic ranch pita chips, underscores the potential of this platform to support future innovation and drive repeat visits. Additionally, the continued evolution of the program — through tiered statuses and non-food perks — is expected to further deepen brand affinity and strengthen consumer retention.
Increased focus on menu innovation bodes well for the company. Seasonal items and premium offerings such as Spicy Lamb Meatballs and avocado continue to generate excitement and elevate check averages. These launches are often supported by targeted marketing campaigns and partnerships with like-minded influencers, creating organic buzz and driving trial. The company’s approach to innovation — anchored by operational discipline and a structured stage-gate process — is likely to have aided its performance in the to-be-reported quarter.
CAVA’s first quarter performance is likely to have faced some headwinds stemming from elevated input costs and ongoing strategic investments. The continued impact of higher food and packaging expenses, particularly due to the inclusion of steak as a core menu item, could have exerted pressure on restaurant-level margins. Additionally, labor-related costs are likely to have remained elevated, reflecting incremental wage adjustments and compliance with legislative changes such as California’s AB 1228.
CAVA Stock Price Performance & Valuation
CAVA Group shares have lost 23.9% in the past three months, underperforming the Zacks Retail – Restaurants industry’s 7.1% dip. The stock has also lagged the S&P 500’s decline of 4.3%. The company’s peers, including Chipotle Mexican Grill, Inc. (CMG - Free Report) , Brinker International, Inc. (EAT - Free Report) , and Dutch Bros Inc. (BROS - Free Report) have lost 11.2%, 4.3% and 14.3%, respectively, in the same period.
CAVA Three-Month Price Performance
Image Source: Zacks Investment Research
From a valuation perspective, CAVA stock is currently trading at a premium. CAVA is currently trading at a forward 12-month price-to-sales (P/S) multiple of 8.96X, well above the industry average of 4.07X. Other industry players, such as Chipotle, Brinker, and Dutch Bros, have P/S ratios of 5.32X, 1.24X, and 6.32X, respectively.
Image Source: Zacks Investment Research
Investment Considerations for CAVA Stock
CAVA Group is focused on capitalizing on growing consumer interest in health-oriented dining and Mediterranean cuisine to drive long-term expansion while maintaining a scalable operating model. The company continues to invest in restaurant growth, digital capabilities, and culinary innovation to enhance the guest experience and deepen brand loyalty. CAVA’s differentiated value proposition — combining premium ingredients, multichannel convenience, and a tech-enabled loyalty platform — supports robust customer engagement and strong traffic trends. Strategic market entries in new geographies, combined with efficient site selection and rising average unit volumes, are expected to support continued sales and margin expansion. With a disciplined cost structure and expanding national footprint, CAVA is well-positioned to deliver improved cash flows in 2025 and beyond.
However, the company faces challenges from rising food and packaging costs, particularly tied to premium menu additions like steak. Continued investments in wages and labor deployment, including compliance with state-level mandates such as California’s AB 1228, could further weigh on profitability. Additionally, elevated general and administrative expenses related to infrastructure, technology, and talent may limit operating leverage as the company scales. A shift in consumer spending behavior or slower-than-expected adoption in newer markets could impact traffic momentum and unit-level performance.
How to Play CAVA Stock Now?
While CAVA Group continues to deliver on strong traffic trends and strategic expansion, several near-term headwinds raise concerns about the stock’s risk-reward profile. Margin pressures stemming from elevated food and labor costs, coupled with ongoing investments in infrastructure and technology, may limit profitability in the upcoming quarters. Additionally, the stock’s rich valuation — trading at more than double the industry average on a price-to-sales basis — limits potential upside from current levels.
Given the lack of earnings beat visibility this quarter, ongoing cost pressures, and an extended valuation, we believe the current setup does not favor fresh buying. Investors holding the stock may consider booking profits or reducing exposure, while new investors are advised to avoid initiating positions at this stage. Until there is greater clarity on margin recovery and a more attractive valuation emerges, CAVA stock appears vulnerable to further downside.
See More Zacks Research for These Tickers
Normally $25 each - click below to receive one report FREE:
Image: Bigstock
CAVA to Post Q1 Earnings: Time to Buy, Sell or Hold the Stock?
CAVA Group, Inc. (CAVA - Free Report) is scheduled to release its first-quarter 2025 results on May 15, 2025.
The Zacks Consensus Estimate for CAVA’s first-quarter earnings per share (EPS) is pegged at 14 cents, suggesting 16.7% growth from 12 cents reported in the prior-year quarter. The consensus mark for earnings has remained unchanged over the past 60 days.
CAVA Earnings Estimate Trend
Image Source: Zacks Investment Research
The consensus mark for first-quarter revenues is pegged at $330.6 million, indicating growth of 27.7% from the year-ago quarter’s reported figure.
CAVA Group has an impressive earnings surprise history. CAVA’s earnings outpaced the Zacks Consensus Estimate in three of the trailing four quarters, and missed on one occasion, with the average surprise being 62.6%. (Find the latest EPS estimates and surprises on Zacks Earnings Calendar.)
CAVA Earnings Surprise History
Image Source: Zacks Investment Research
Q1 Earnings Whispers for CAVA Stock
Our proven model does not conclusively predict an earnings beat for CAVA Group this time around. A stock needs to have a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) to beat on earnings. But that's not the case here. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
CAVA Group has an Earnings ESP of -2.00% and a Zacks Rank #4 (Sell).
You can see the complete list of today’s Zacks #1 Rank stocks here.
Factors Likely to Influence CAVA’s Q1 Results
CAVA Group’s first-quarter performance is expected to have benefited from strong momentum in traffic growth, strategic expansion efforts, and continued enhancements across its digital and in-restaurant experiences. With a differentiated Mediterranean brand proposition and disciplined execution, the company appears well-positioned to sustain its growth trajectory in the to-be-reported quarter.
Management anticipates that same-restaurant sales growth will be highest in the first quarter before moderating over the remainder of the year, aligning with the company’s full-year guidance of 6-8% growth. A combination of elevated traffic, modest pricing, and increasing customer engagement through digital and loyalty channels is likely to have aided its performance in the to-be-reported quarter.
CAVA’s loyalty program, a key strategic pillar, is likely to have played a meaningful role in boosting engagement and frequency during the quarter. Since its reintroduction, the program has delivered notable increases in sales participation, particularly among lower-frequency users, and enabled targeted behavioral influence through point-based reward redemptions. The success of limited-time incentives tied to new menu items, such as the garlic ranch pita chips, underscores the potential of this platform to support future innovation and drive repeat visits. Additionally, the continued evolution of the program — through tiered statuses and non-food perks — is expected to further deepen brand affinity and strengthen consumer retention.
Increased focus on menu innovation bodes well for the company. Seasonal items and premium offerings such as Spicy Lamb Meatballs and avocado continue to generate excitement and elevate check averages. These launches are often supported by targeted marketing campaigns and partnerships with like-minded influencers, creating organic buzz and driving trial. The company’s approach to innovation — anchored by operational discipline and a structured stage-gate process — is likely to have aided its performance in the to-be-reported quarter.
CAVA’s first quarter performance is likely to have faced some headwinds stemming from elevated input costs and ongoing strategic investments. The continued impact of higher food and packaging expenses, particularly due to the inclusion of steak as a core menu item, could have exerted pressure on restaurant-level margins. Additionally, labor-related costs are likely to have remained elevated, reflecting incremental wage adjustments and compliance with legislative changes such as California’s AB 1228.
CAVA Stock Price Performance & Valuation
CAVA Group shares have lost 23.9% in the past three months, underperforming the Zacks Retail – Restaurants industry’s 7.1% dip. The stock has also lagged the S&P 500’s decline of 4.3%. The company’s peers, including Chipotle Mexican Grill, Inc. (CMG - Free Report) , Brinker International, Inc. (EAT - Free Report) , and Dutch Bros Inc. (BROS - Free Report) have lost 11.2%, 4.3% and 14.3%, respectively, in the same period.
CAVA Three-Month Price Performance
Image Source: Zacks Investment Research
From a valuation perspective, CAVA stock is currently trading at a premium. CAVA is currently trading at a forward 12-month price-to-sales (P/S) multiple of 8.96X, well above the industry average of 4.07X. Other industry players, such as Chipotle, Brinker, and Dutch Bros, have P/S ratios of 5.32X, 1.24X, and 6.32X, respectively.
Image Source: Zacks Investment Research
Investment Considerations for CAVA Stock
CAVA Group is focused on capitalizing on growing consumer interest in health-oriented dining and Mediterranean cuisine to drive long-term expansion while maintaining a scalable operating model. The company continues to invest in restaurant growth, digital capabilities, and culinary innovation to enhance the guest experience and deepen brand loyalty. CAVA’s differentiated value proposition — combining premium ingredients, multichannel convenience, and a tech-enabled loyalty platform — supports robust customer engagement and strong traffic trends. Strategic market entries in new geographies, combined with efficient site selection and rising average unit volumes, are expected to support continued sales and margin expansion. With a disciplined cost structure and expanding national footprint, CAVA is well-positioned to deliver improved cash flows in 2025 and beyond.
However, the company faces challenges from rising food and packaging costs, particularly tied to premium menu additions like steak. Continued investments in wages and labor deployment, including compliance with state-level mandates such as California’s AB 1228, could further weigh on profitability. Additionally, elevated general and administrative expenses related to infrastructure, technology, and talent may limit operating leverage as the company scales. A shift in consumer spending behavior or slower-than-expected adoption in newer markets could impact traffic momentum and unit-level performance.
How to Play CAVA Stock Now?
While CAVA Group continues to deliver on strong traffic trends and strategic expansion, several near-term headwinds raise concerns about the stock’s risk-reward profile. Margin pressures stemming from elevated food and labor costs, coupled with ongoing investments in infrastructure and technology, may limit profitability in the upcoming quarters. Additionally, the stock’s rich valuation — trading at more than double the industry average on a price-to-sales basis — limits potential upside from current levels.
Given the lack of earnings beat visibility this quarter, ongoing cost pressures, and an extended valuation, we believe the current setup does not favor fresh buying. Investors holding the stock may consider booking profits or reducing exposure, while new investors are advised to avoid initiating positions at this stage. Until there is greater clarity on margin recovery and a more attractive valuation emerges, CAVA stock appears vulnerable to further downside.