VOL. XCIV, NO. 247
★ EXPANSION-STAGE STOCKS & SCALING SETUPS ★
NO ADVICE
Wednesday, January 7, 2026
CAVA Group, Inc.
CAVA · NYSE
This analysis is generated by AI and supervised by humans. Scores reflect business model strength, scaling runway, and valuation setup. Mistakes can happen.
Overview
Mediterranean fast-casual restaurant chain with company-owned units and a high digital order mix.
Thesis summary
CAVA is an early-stage national fast-casual chain with strong unit economics (AUV ~ $2.9M and mid-20s restaurant-level margins) and a long runway to expand store count toward management's 1,000-restaurant goal. If it sustains new-unit productivity while holding margins, operating leverage + unit growth can drive multi-year earnings power growth.
Investment Thesis
Why Now?
Near-term same-store sales guidance was cut amid macro pressure, but unit growth remains intact and new-store cohorts are still trending >$3M AUV-creating a setup where execution on openings and margin stabilization could re-rate the stock.
Scaling Thesis
Scaling is enabled by (1) repeatable unit-level economics (high AUV and restaurant-level margin), (2) demonstrated portability of new stores in new geographies, (3) heavy digital mix improving throughput/loyalty, and (4) growing G&A leverage as the restaurant base expands.
Competitive Moat
Brand/positioning in 'health + flavor' fast casual, a menu/cuisine niche with broad appeal, company-owned model (tight operational control), and a digital flywheel (app + pickup/delivery) that supports frequency and data-driven ops.
Key Assumptions
Valuation Scenarios
Illustrative: 2028E revenue $1.9B, 13% adj EBITDA margin, 18x EV/adj EBITDA; assumes valuation compression + slower comp/unit ramp.
Illustrative: 2028E revenue $2.3B, 16% adj EBITDA margin, 27x EV/adj EBITDA; assumes steady openings + modest margin expansion from scale.
Illustrative: 2028E revenue $2.6B, 18% adj EBITDA margin, 32x EV/adj EBITDA; assumes strong new-unit productivity, comps rebound, and premium growth multiple persists.
Catalysts
FY2025/Q4 results and 2026 unit-opening + margin outlook.
If 2026 openings stay high and margins stabilize, the market can look through the 2025 comp slowdown.
Evidence that new restaurants keep trending around/above ~$3M AUV as the company enters more new geographies.
Supports the long runway narrative and reduces fear of cannibalization/portability issues.
Same-restaurant sales growth re-accelerates above 3% as macro pressure eases and loyalty/marketing matures.
Improves visibility into pricing power + traffic and can expand the valuation multiple.
Risks
Consumers (especially younger cohorts) trade down, pressuring traffic and same-store sales.
Mitigation: Track traffic vs. pricing mix, promo intensity, and management commentary; require comps stabilization before adding size.
Commodity inflation/tariffs and wage pressure compress restaurant-level margins.
Mitigation: Watch restaurant-level profit margin and food/labor % trends; prefer entry when margin headwinds are known/contained.
Rapid unit growth leads to weaker site selection, lower AUVs, or operational strain (training, throughput, supply chain).
Mitigation: Monitor new store AUVs, new-unit productivity, and operational KPIs (wait times, digital accuracy).
High expectations embedded in the stock create downside if growth slows or rates rise.
Mitigation: Use staged entry, demand KPI confirmation, and avoid chasing multiple expansion without fundamentals.
Scale Readiness
AUV ~ $2.9M and restaurant-level margin mid-20s.
Comps positive but slowed vs. 2024; macro headwinds evident.
Unit count growing ~high-teens YoY; new unit productivity stated >100%.
High digital mix supports throughput; still scaling teams/training.
Tariffs/commodity noise; needs continued execution as footprint expands.
Digital mix ~38% suggests strong adoption.
Pre-opening costs trending up; balance with growth pace and ROI.
Curation & Accuracy
This directory blends AI‑assisted discovery with human curation. Entries are reviewed, edited, and organized with the goal of expanding coverage and sharpening quality over time. Your feedback helps steer improvements (because no single human can capture everything all at once).
Details change. Pricing, features, and availability may be incomplete or out of date. Treat listings as a starting point and verify on the provider’s site before making decisions. If you spot an error or a gap, send a quick note and I’ll adjust.