Wall Street Zen Upgrades CAVA Group (NYSE:CAVA) to Hold

Key Points

• Wall Street Zen upgraded CAVA Group from “sell” to “hold”, adding to a generally bullish analyst backdrop after the company’s recent earnings report.
• CAVA recently posted better-than-expected quarterly results, with EPS of $0.20 versus $0.17 expected and revenue of $438.27 million, up 32.1% year over year.
• Despite positive analyst sentiment, the stock traded down 1.1% to $80.41, while insider selling and a high valuation remain points of attention for investors.

CAVA Group (NYSE:CAVA - Get Free Report) was upgraded by stock analysts at Wall Street Zen from a "sell" rating to a "hold" rating in a research note issued on Sunday.

A number of other equities research analysts also recently issued reports on CAVA. Piper Sandler increased their price objective on CAVA Group from $85.00 to $92.00 and gave the stock an "overweight" rating in a research report on Wednesday. Weiss Ratings upgraded CAVA Group from a "hold (c-)" rating to a "hold (c)" rating in a research report on Wednesday. Telsey Advisory Group increased their price objective on CAVA Group from $92.00 to $95.00 and gave the stock an "outperform" rating in a research report on Wednesday. Guggenheim started coverage on CAVA Group in a research report on Thursday, March 26th. They issued a "buy" rating and a $100.00 price objective on the stock. Finally, Morgan Stanley increased their price objective on CAVA Group from $85.00 to $86.00 and gave the stock an "equal weight" rating in a research report on Wednesday. One research analyst has rated the stock with a Strong Buy rating, sixteen have given a Buy rating, ten have issued a Hold rating and one has issued a Sell rating to the company. Based on data from MarketBeat, the stock has a consensus rating of "Moderate Buy" and a consensus target price of $93.19.

CAVA Group Trading Down 1.1%

Shares of NYSE:CAVA opened at $80.41 on Friday. The company has a 50 day moving average of $84.97 and a 200 day moving average of $69.73. The stock has a market cap of $9.37 billion, a P/E ratio of 154.63, a P/E/G ratio of 5.61 and a beta of 1.90. CAVA Group has a 12 month low of $43.41 and a 12 month high of $98.79.

CAVA Group (NYSE:CAVA - Get Free Report) last issued its quarterly earnings data on Tuesday, May 19th. The company reported $0.20 EPS for the quarter, beating the consensus estimate of $0.17 by $0.03. CAVA Group had a net margin of 4.79% and a return on equity of 7.92%. The company had revenue of $438.27 million during the quarter, compared to analysts' expectations of $360.89 million. During the same quarter in the previous year, the company earned $0.22 earnings per share. CAVA Group's revenue for the quarter was up 32.1% on a year-over-year basis. On average, equities analysts forecast that CAVA Group will post 0.54 earnings per share for the current fiscal year.

Insider Activity at CAVA Group

In related news, insider Kelly Costanza sold 10,010 shares of the stock in a transaction on Thursday, May 21st. The stock was sold at an average price of $79.87, for a total value of $799,498.70. Following the transaction, the insider owned 113,850 shares of the company's stock, valued at $9,093,199.50. This represents a 8.08% decrease in their ownership of the stock. The transaction was disclosed in a legal filing with the Securities & Exchange Commission, which is available through the SEC website. The sale was made to cover tax withholding obligations related to the vesting of equity awards. Also, insider Theodoros Xenohristos sold 9,044 shares of the stock in a transaction on Monday, May 11th. The shares were sold at an average price of $79.75, for a total value of $721,259.00. Following the completion of the transaction, the insider directly owned 327,882 shares in the company, valued at approximately $26,148,589.50. This represents a 2.68% decrease in their position. The SEC filing for this sale provides additional information. The sale was made to cover tax withholding obligations related to the vesting of equity awards. Insiders have sold a total of 24,235 shares of company stock valued at $1,920,420 over the last 90 days. 6.70% of the stock is owned by insiders.

Institutional Inflows and Outflows

A number of institutional investors have recently added to or reduced their stakes in CAVA. Bison Wealth LLC bought a new position in CAVA Group in the fourth quarter valued at $208,000. Goldman Sachs Group Inc. grew its stake in shares of CAVA Group by 14.3% during the first quarter. Goldman Sachs Group Inc. now owns 606,780 shares of the company's stock valued at $52,432,000 after buying an additional 75,828 shares during the last quarter. UBS AM A Distinct Business Unit of UBS Asset Management Americas LLC grew its stake in shares of CAVA Group by 17.3% during the first quarter. UBS AM A Distinct Business Unit of UBS Asset Management Americas LLC now owns 236,622 shares of the company's stock valued at $20,447,000 after buying an additional 34,860 shares during the last quarter. Brown Advisory Inc. grew its stake in shares of CAVA Group by 9.3% during the second quarter. Brown Advisory Inc. now owns 2,979 shares of the company's stock valued at $251,000 after buying an additional 253 shares during the last quarter. Finally, Cresset Asset Management LLC grew its stake in shares of CAVA Group by 20.3% during the second quarter. Cresset Asset Management LLC now owns 9,165 shares of the company's stock valued at $772,000 after buying an additional 1,549 shares during the last quarter. Institutional investors own 73.15% of the company's stock.

Trending Headlines about CAVA Group

Here are the key news stories impacting CAVA Group this week:

• Positive Sentiment: Argus upgraded CAVA Group from hold to buy, reinforcing the optimistic post-earnings sentiment around the stock. Argus upgrade coverage
• Positive Sentiment: Analyst commentary continued to lean bullish, with Piper Sandler reaffirming a buy rating, Roth MKM reiterating buy, and TD Cowen maintaining a buy call. Piper Sandler coverage
• Positive Sentiment: Recent coverage highlighted strong Q1 results, including 9.7% same-restaurant sales growth and improved operating leverage, which supports the case for continued fundamental momentum. Seeking Alpha article
• Neutral Sentiment: DA Davidson raised its price target to $84 from $80 but kept a neutral rating, suggesting upside potential but also valuation caution. DA Davidson price target update
• Neutral Sentiment: Insider selling was disclosed by CAO Adam David Phillips and insider Kelly Costanza, though Costanza’s sale was tied to tax withholding on vesting equity awards, making the signal less negative than a discretionary sale. SEC filing

About CAVA Group

CAVA Group, Inc NYSE: CAVA is a leading fast-casual restaurant company specializing in Mediterranean-inspired cuisine. Operating under the CAVA brand, the company offers customizable bowls, pitas and salads built around a variety of proteins, grains, fresh vegetables and house-made spreads. With a focus on high-quality ingredients and made-to-order preparation, CAVA aims to deliver a casual yet elevated dining experience for dine-in, takeout and catering customers.

Founded in 2011 in the Washington, DC metro area by Ike Grigoropoulos, Dimitri Katsanis and Brett Schulman, CAVA has pursued an aggressive growth strategy that included the 2018 acquisition of Zoe's Kitchen.

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