Cava stock rises to all-time high on strong earnings and revenue outlook

• Shares of Mediterranean fast-casual chain Cava Group rose sharply on Wednesday, a day after third-quarter results beat analysts’ estimates.

• Sales, profit and same-store sales growth increased compared to the previous year.

• Cava again raised its fiscal 2024 same-store sales growth forecast.

Cava Group shares (CAVA) rose 17% on Wednesday, a day after the Mediterranean fast-casual chain reported third-quarter results that beat expectations and again raised its forecast for same-store sales growth in fiscal 2024.

Cava reported net income of $18 million on revenue of $241.5 million, both significantly higher than a year ago and above analyst consensus estimates compiled by Visible Alpha.

Cava’s same-store sales increased 18% year-over-year, reflecting a 13% increase in traffic and a 5% increase in menu prices and product mix.

The chain raised some of its full-year forecasts as it expects to open more stores than previously forecast and expects same-store sales to rise 12 to 13 percent, up from 8.5 to 9.5 percent last quarter, which itself had been raised to 6.5% from the previous range of 4.5%.

Cava also increased its forecast profit margin per restaurant and adjusted earnings before interest, taxes, depreciation and amortization (EBITDA).

Cava shares have risen repeatedly following strong gains since its initial public offering (IPO) last year. They rose 17% to a record $170.25 on Wednesday, nearly quadrupling this year.

However, JPMorgan analysts reiterated their “neutral” rating on Wednesday and said they believe “many years of growth” are already priced into the stock, even as they raised their price target to $110 from $90.