CAVA Group, Inc. (CAVA)
Valuation Overview•Is CAVA Group, Inc. Overvalued or Undervalued?
Priced at a premium to peer multiples and intrinsic cash flows, demanding strong execution to justify current levels.
Fragile underlying quality score of 37/100; weak margins or elevated debt leverage warrant caution.
Wall Street forecasts a balanced outlook with consensus price targets near the current price.
Verdict: Mixed fundamental profile with offsetting strengths and weaknesses.
Wall Street sentiment is generally neutral with steady expected earnings growth. The company currently retains all capital for reinvestment and growth rather than returning it to shareholders.
CAVA struggles with subpar profitability and pressured margins. However, the balance sheet carries elevated leverage, requiring careful monitoring of debt servicing capabilities.
The company is driving exceptional top-line expansion (27.9% 3Y CAGR) paired with stable bottom-line earnings. Operating efficiency remains adequate with margins around 7.2%.
| Financial Metric | Trend (12Q) | Latest Qtr | 1Y Growth | 3Y CAGR | 5Y CAGR | 10Y CAGR |
|---|---|---|---|---|---|---|
| Revenue | $438.3M | +22.4% | +27.9% | — | — | |
| EBITDA | $60.1M | — | — | — | — | |
| Net Income | $23.6M | -51.1% | — | — | — | |
| EPS (Diluted) | $0.20 | -50.9% | — | — | — | |
| Free Cash Flow | $15.5M | -50.6% | — | — | — |
| Metric | TTM | 3Y Avg | 5Y Avg | 10Y Avg |
|---|---|---|---|---|
| Gross Margin | 18.6% | 22.7% | 20.4% | 20.4% |
| Operating Margin | 7.2% | 3.9% | -1.9% | -1.9% |
| Net Margin | 4.8% | 6.9% | 0.6% | 0.6% |
| FCF Margin | 3.0% | 0.7% | -5.2% | -5.2% |
| Quarter | EPS Est. | EPS Act. | Surprise | EPS | Rev |
|---|---|---|---|---|---|
| Q2'26Latest | $0.17 | $0.20 | +17.6% | ||
| Q1'26 | $0.03 | $0.04 | +33.3% | ||
| Q4'25 | $0.13 | $0.12 | -7.7% | ||
| Q3'25 | $0.13 | $0.16 | +23.1% | ||
| Q2'25 | $0.14 | $0.22 | +57.1% | ||
| Q1'25 | $0.06 | $0.05 | -16.7% | ||
| Q4'24 | $0.11 | $0.15 | +36.4% | ||
| Q3'24 | $0.13 | $0.17 | +30.8% |
Total return is +19.8% (1Y), lagging the benchmark by -5.2%
| Period | Total Return | vs S&P 500 (Alpha) | Dividend Contribution |
|---|---|---|---|
| YTD | +47.3% | +38.0% | — |
| 1Y | +19.8% | -5.2% | — |
| 3YCAGR | +32.4% | +12.3% | — |
| 5YCAGR | +15.3% | +2.5% | — |
| 10YCAGR | +7.4% | -6.4% | — |
The S&P 500 is at 31.3x trailing P/E — Expensive relative to historical averages.
Quick answers to common questions about CAVA Group, Inc. (CAVA) valuation, health, and returns.
CAVA Group, Inc. is estimated to be overvalued under our discounted cash flow framework. relative multiples indicate the stock is Expensive versus peers compared to industry peers. overvalued (implying -25.1% downside from DCF intrinsic value of $66.77)
CAVA Group, Inc. has multiple valuation anchors: DCF Intrinsic Value: $66.77 | Peer Relative Fair Value: $23.14 | Wall Street Analyst Target: $89.89 (implying +0.8% upside). A convergence of these signals offers higher conviction.
CAVA Group, Inc. displays weak financial health with a composite quality score of 37/100, supported by a Altman Z-Score of 11.5 (safe zone), Piotroski F-Score of 5/9, Return on Invested Capital (ROIC) of 7.1%.
CAVA Group, Inc. does not return material capital to shareholders via dividends or share repurchases, electing to retain earnings to fund internal growth.
CAVA Group, Inc.'s current growth trajectory is Decelerating. The company achieved +22.4% 1Y revenue growth and -50.9% 1Y EPS growth, compared to its 3Y revenue CAGR of +27.9%.
Wall Street consensus is Buy based on 25 analysts, beating EPS expectations in 83% of recent quarters with a 2-quarter streak. The consensus price target represents a +0.8% change from current levels.
Investment risks for CAVA Group, Inc. include: -52.6% 1-year max drawdown, high beta (1.56x market volatility). Volatility risk is characterized by a beta of 1.56x.
No. These computations are purely quantitative model outputs for informational purposes. They do not account for qualitative management shifts or macro events. Always consult a licensed RIA before buying or selling shares.
Disclaimer: This page is for informational purposes only and does not constitute financial advice. All valuation models, scores, and target estimates are automated computations under stated assumptions and should not be relied upon as the sole basis for any investment decision.