- CAVA Group is a Mediterranean food chain that is expanding its location base at breakneck speed.
- CAVA Group will release first quarter results after the close on Tuesday.
- Wall Street expects $0.05 in adjusted EPS and $245.5 million in revenue.
- This compares to $0.03 in adjusted EPS in the fourth quarter on revenue of $177.2 million.
CAVA Group (CAVA) is trading at an all-time high ahead of its results release, scheduled for after market on Tuesday, May 28.
Excitement surrounds the Mediterranean chain's first-quarter results as it rapidly opens new locations across the U.S. market. The company opened 90 net new stores in the fourth quarter and is on track to open approximately 50 more in 2024.
News about CAVA shares
Wall Street expects CAVA Group to report $0.05 in adjusted earnings per share on revenue of $245.5 million. This equates to a 66% quarterly increase in EPS and a 39% quarterly increase in revenue.
The number of net new restaurants will be of great interest to those listening closely to the earnings call led by CEO Brett Schulman. Additionally, merchants will focus on profit margin at the restaurant level, which increased by 240 basis points to 22.4% of sales in the fourth quarter.
The quarter has received increasing interest as analysts have praised the company since its last earnings release in February. In the last three months, earnings estimates have been revised upward five times, and no downward revisions have been seen. Revenue estimates have seen nine upward and one downward revisions.
Argus made the first move in April when analyst Christine Dooley gave it a Buy rating and set a then-impressive price target of $70 in the recent IPO. Shares closed last Friday ahead of the Memorial Day holiday just below $83 and advanced to $84 after hours.
The company has a profitable business model, a clean balance sheet and an experienced management team,” Dooley wrote at the time.
The main sticking point for buyers is its rating, however. CAVA stock trades at 356 times forward earnings. Dooley insists these valuations are less meaningful at the beginning of a young chain's growth when profits can skyrocket overnight.
Interestingly, when UBS analysts covered the restaurant sector earlier this month, CAVA stock was rated Neutral in terms of momentum.
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CAVA Stock Forecast
Despite a near-continuous rally since last October, CAVA stock is just below overbought condition on the Relative Strength Index (RSI) at 68. The Moving Average Convergence/Divergence (MACD) indicator tells us says a bearish turn is at hand, although a rise in earnings would eliminate that possibility.
CAVA stock has been following the 12-day Exponential Moving Average (EMA) for much of its recent run, but the 60-day EMA came to the rescue during the April correction.
If the gains turn out to be lackluster, CAVA is expected to find its base near the 60-day EMA around $67. If earnings are better than expected, then CAVA could easily reach $90 for the first time.
CAVA Stock Daily Chart
Source: Fx Street

I am Joshua Winder, a senior-level journalist and editor at World Stock Market. I specialize in covering news related to the stock market and economic trends. With more than 8 years of experience in this field, I have become an expert in financial reporting.