CAVA Group, Inc. (CAVA) delivered a strong performance in the second quarter, exceeding both earnings and revenue expectations. The company reported earnings per share of 17 cents, surpassing the analyst consensus estimate of 12 cents by a significant 41.67%. Revenue for the quarter reached $233.495 million, exceeding analysts’ expectations by 7% and representing a remarkable 35.05% increase compared to the same period last year.
CAVA’s CEO, Brett Schulman, attributed the positive results to the strength of their brand and unique value proposition. The company’s confidence in its future performance is reflected in its revised fiscal year 2024 guidance. CAVA raised its adjusted EBITDA guidance from a range of $100 million to $105 million to a range of $105 million to $114 million. Additionally, the company raised its same-restaurant sales growth forecast from between 4.5% and 6.5% to between 8.5% and 9.5%.
The market reacted positively to CAVA’s strong earnings report, with several analysts adjusting their price targets on the stock. Wedbush analyst Nick Setyan maintained an Outperform rating on CAVA and raised the price target from $100 to $120. Similarly, Baird analyst David Tarantino maintained an Outperform rating and increased the price target from $105 to $125. Stifel analyst Chris O’Cull maintained a Buy rating and raised the price target from $110 to $118. Jefferies analyst Andy Barish also maintained a Buy rating and raised the price target from $94 to $117. Finally, TD Cowen analyst Andrew Charles maintained a Buy rating, while increasing the price target from $95 to $115.
These analyst upgrades indicate strong confidence in CAVA’s future prospects, fueled by the company’s recent strong performance and positive outlook. The company’s focus on its brand and value proposition, coupled with its robust growth trajectory, seems to have captured the attention of investors and analysts alike.
