Mediterranean fast-casual restaurant chain CAVA (NYSE:CAVA) will be reporting results tomorrow after the bell. Here’s what to expect.
CAVA beat analysts’ revenue expectations by 4.9% last quarter, reporting revenues of $243.8 million, up 38.9% year on year. It was a stunning quarter for the company, with a solid beat of analysts’ EBITDA estimates and an impressive beat of analysts’ same-store sales estimates.
Is CAVA a buy or sell going into earnings? Read our full analysis here, it’s free.
This quarter, analysts are expecting CAVA’s revenue to grow 25.5% year on year to $222.4 million, slowing from the 36.4% increase it recorded in the same quarter last year. Adjusted earnings are expected to come in at $0.06 per share.
Analysts covering the company have generally reconfirmed their estimates over the last 30 days, suggesting they anticipate the business to stay the course heading into earnings. CAVA has missed Wall Street’s revenue estimates twice over the last two years.
Looking at CAVA’s peers in the modern fast food segment, some have already reported their Q4 results, giving us a hint as to what we can expect. Shake Shack delivered year-on-year revenue growth of 14.8%, meeting analysts’ expectations, and Chipotle reported revenues up 13.1%, in line with consensus estimates. Shake Shack traded down 2.2% following the results while Chipotle was also down 2.6%.
Read our full analysis of Shake Shack’s results here and Chipotle’s results here.
Valuation multiples for many growth stocks have not yet reverted to their early 2021 highs, but the market has been optimistic as of late due to a soft landing. This is an economic situation where rate hikes successfully quelled inflation but did not send the economy into a recession. Furthermore, recent rate cuts and Donald Trump's triumph in the 2024 Presidential election have been tailwinds for the market, and while some of the modern fast food stocks have shown solid performance, the group has generally underperformed, with share prices down 3.2% on average over the last month. CAVA is down 11.2% during the same time and is heading into earnings with an average analyst price target of $147.92 (compared to the current share price of $109.50).
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