CAVA Group (CAVA Quick QuoteCAVA - Free Report) has staged a strong comeback, growing 11.8% over the past five sessions, easily outpacing the industry’s 3.8% rise. This rally comes despite the stock plunging 30.4% over the past six months, while the broader industry has gained 2.5%.

Price Performance

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Now trading at $82.71, CAVA is showing signs of renewed momentum. While the stock remains well below its 52-week high of $172.43, it is above its 52-week low of $70. In the past five trading sessions, CAVA outperformed industry players like Chipotle Mexican Grill, Inc. (CMG Quick QuoteCMG - Free Report) , Brinker International, Inc. (EAT Quick QuoteEAT - Free Report) and Wingstop Inc. (WING Quick QuoteWING - Free Report) .

Analysts and investors are warming up again to fast-casual concepts like CAVA amid signs of stabilization in consumer discretionary spending. There's renewed optimism around brands with strong digital engagement, health-forward menus and efficient store expansion models.

With the tide seemingly turning, investors are watching closely: Is this the beginning of a sustained recovery?

Wall Street Stays Bullish on CAVA’s Growth Trajectory

The Zacks Consensus Estimate for 2025 and 2026 sales estimates are pegged at $1.19 billion and $1.45 billion, suggesting year-over-year increases of 24% and 21.4%, respectively. 

The consensus estimates for 2025 and 2026 earnings are pegged at 58 cents and 68 cents, suggesting gains of 38.1% and 17%, year over year. Alternatively, Chipotle, Brinker and Wingstop’s earnings for the current year are likely to witness year-over-year growth of 8%, 114.4% and 6.6%, respectively.

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Average Target Price for CAVA Suggests an Upside

Based on short-term price targets offered by 13 analysts, CAVA’s average price target represents an increase of 37% from the last closing price of $82.71.

CAVA’s Solid Same-Restaurant Sales & Traffic

The company posted an impressive 10.8% increase in same-restaurant sales in the first quarter 2025 due to a 7.5% rise in guest traffic. Notably, CAVA is experiencing traffic gains across all regions, dayparts and income groups, with particularly strong momentum among lower-income diners. On a three-year basis, same-store sales have jumped 41.5%, underscoring the brand’s growing relevance and customer loyalty.

CAVA’s Aggressive Restaurant Expansion

CAVA continues to scale its footprint, opening 15 net new units in the first quarter 2025, bringing its total count to 382. It expects to open 64-68 locations in 2025, slightly above its previous guidance. New restaurants, especially in markets like Indiana, Miami and Lafayette, LA, are outperforming expectations in sales and margins.

Clear Long-Term Growth Vision

Management remains focused on long-term growth, reaffirming its plan to operate at least 1,000 restaurants by 2032. Expansion into untapped markets such as Detroit and Pittsburgh is central to this strategy.

Loyalty Program Momentum

CAVA’s revamped loyalty program is proving to be a powerful customer retention tool. Sales tied to loyalty members have grown significantly, with nearly 8 million members now enrolled. The brand is seeing success with targeted promotions around new menu items, and a tiered reward system is expected to launch later this year to further boost engagement.

Near-Term Headwinds

High costs and economic uncertainty are concerning. The company continues to monitor consumer sentiment, tariffs and inflation. 

CAVA is showing restraint in its pricing strategy, implementing a modest 1.7% menu price increase at the start of 2025. This comes at a time when inflationary pressures, especially in food costs, continue to weigh on restaurant margins across the industry.

Despite near-term cost headwinds, CAVA remains confident in its ability to protect restaurant-level margins through operational efficiency and strong sales leverage. With no additional price increases planned for the remainder of the year, the company is optimistic about its ability to protect margins and sustain growth momentum in a challenging economic environment.

CAVA Trades at a Premium

Despite its recent decline, CAVA is currently priced at a premium relative to its industry, with a forward 12-month price-to-sales (P/S) ratio of 7.23, above the industry average. Conversely, other industry players like Chipotle, Brinker and Wingstop are trading at 5.88X, 1.51X and 11.41X, respectively.

P/S (F12M)

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End Notes

CAVA is showing encouraging signs of a turnaround, driven by strong guest traffic, expanding loyalty engagement and restaurant openings that are outperforming expectations. The company continues to execute on its long-term growth strategy, with a clear focus on market expansion, operational efficiency and maintaining brand relevance through health-forward offerings and digital engagement. 

While the recent rally in the stock price reflects growing investor optimism, concerns around elevated costs, inflation and a still-challenging macroeconomic backdrop warrant caution. CAVA's premium valuation suggests much of its growth potential may already be priced in.

For existing investors, the improving fundamentals support a hold strategy, but for new buyers, it may be wise to wait for a more attractive entry point as the company navigates near-term headwinds. CAVA currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.