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Cava Group (CAVA) Registers a Bigger Fall Than the Market: Important Facts to Note

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Cava Group (CAVA - Free Report) closed at $62.39 in the latest trading session, marking a -1.09% move from the prior day. The stock's performance was behind the S&P 500's daily loss of 0.1%. At the same time, the Dow added 0.57%, and the tech-heavy Nasdaq lost 0.33%.

Shares of the Mediterranean restaurant chain witnessed a loss of 7.85% over the previous month, trailing the performance of the Retail-Wholesale sector with its gain of 2.91%, and the S&P 500's gain of 2.57%.

Investors will be eagerly watching for the performance of Cava Group in its upcoming earnings disclosure. The company is expected to report EPS of $0.14, down 6.67% from the prior-year quarter. Simultaneously, our latest consensus estimate expects the revenue to be $294.91 million, showing a 20.95% escalation compared to the year-ago quarter.

For the entire fiscal year, the Zacks Consensus Estimates are projecting earnings of $0.56 per share and a revenue of $1.18 billion, representing changes of +33.33% and +22.91%, respectively, from the prior year.

Investors might also notice recent changes to analyst estimates for Cava Group. These revisions typically reflect the latest short-term business trends, which can change frequently. As a result, we can interpret positive estimate revisions as a good sign for the business outlook.

Based on our research, we believe these estimate revisions are directly related to near-term stock moves. To capitalize on this, we've crafted the Zacks Rank, a unique model that incorporates these estimate changes and offers a practical rating system.

The Zacks Rank system, stretching from #1 (Strong Buy) to #5 (Strong Sell), has a noteworthy track record of outperforming, validated by third-party audits, with stocks rated #1 producing an average annual return of +25% since the year 1988. Over the past month, the Zacks Consensus EPS estimate has remained steady. At present, Cava Group boasts a Zacks Rank of #3 (Hold).

In terms of valuation, Cava Group is currently trading at a Forward P/E ratio of 112.64. This denotes a premium relative to the industry average Forward P/E of 20.31.

Investors should also note that CAVA has a PEG ratio of 3.15 right now. This metric is used similarly to the famous P/E ratio, but the PEG ratio also takes into account the stock's expected earnings growth rate. The average PEG ratio for the Retail - Restaurants industry stood at 2.31 at the close of the market yesterday.

The Retail - Restaurants industry is part of the Retail-Wholesale sector. This group has a Zacks Industry Rank of 185, putting it in the bottom 26% of all 250+ industries.

The Zacks Industry Rank assesses the strength of our separate industry groups by calculating the average Zacks Rank of the individual stocks contained within the groups. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.

Remember to apply Zacks.com to follow these and more stock-moving metrics during the upcoming trading sessions.


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