## CAVA Stock Soars After Beating Earnings Expectations, Raising 2024 Outlook
The Mediterranean fast-casual chain, CAVA Group, Inc. (CAVA), is riding a wave of success after delivering impressive third-quarter earnings that surpassed analysts’ predictions. The company’s shares surged over 14% on Tuesday following the release of the report, indicating strong investor confidence in the brand’s future.
The positive results were driven by a combination of factors. CAVA reported earnings per share of $0.15, outperforming the anticipated $0.11, and generated $243.82 million in revenue, exceeding analysts’ expectations of $233.59 million. This translates to a robust 39% year-over-year growth in sales.
The company’s performance is further highlighted by its restaurant-level profit, which climbed 41.9% to $61.8 million compared to the same period in 2023. This growth is supported by impressive same-restaurant sales growth of 18.1%, an average unit volume of $2.8 million, and a digital revenue mix of 35.8%.
CAVA’s strong financial performance wasn’t just about meeting current expectations; it also led to a revised and more optimistic outlook for the entire 2024 fiscal year. The company anticipates opening 56 to 58 net new restaurants, exceeding its prior projection of 54 to 57. Additionally, CAVA expects same-restaurant sales growth to range from 12% to 13%, exceeding its previous estimate of 8.5% to 9.5%.
The positive news has also sparked a flurry of activity among analysts, with several revising their price targets for CAVA. Wedbush analyst Nick Setyan, for example, maintained an Outperform rating on CAVA while raising the price target from $155 to $190. TD Cowen analyst Andrew Charles followed suit, maintaining a Buy rating and increasing the price target from $130 to $150. Even JP Morgan analyst John Ivankoe, who previously held a Neutral rating, raised his price target from $90 to $110.
This combination of positive earnings, an improved outlook, and bullish analyst sentiment suggests a bright future for CAVA. With its growing popularity and impressive financial performance, the Mediterranean fast-casual chain is poised to continue its upward trajectory in the coming months and years.
