CAVA Group, Inc.
CAVA Group, Inc. Fundamental Analysis
CAVA Group, Inc. (CAVA) shows moderate financial fundamentals with a PE ratio of 58.36, profit margin of 12.14%, and ROE of 18.69%. The company generates $1.1B in annual revenue with strong year-over-year growth of 32.25%.
Key Strengths
Areas of Concern
The stock receives a Fundamental Health Score of 72.4/100 based on profitability, valuation, growth, and balance sheet metrics. The B grade reflects solid fundamentals with room for improvement in valuation or growth.
Fundamental Health Score
We analyze CAVA's fundamental strength across five key dimensions:
Efficiency Score
ExcellentCAVA demonstrates superior asset utilization.
Valuation Score
ModerateCAVA shows balanced valuation metrics.
Growth Score
ModerateCAVA shows steady but slowing expansion.
Financial Health Score
ExcellentCAVA maintains a strong and stable balance sheet.
Profitability Score
ModerateCAVA maintains healthy but balanced margins.
Key Financial Metrics
Is CAVA Expensive or Cheap?
P/E Ratio
CAVA trades at 58.36 times earnings. This suggests a premium valuation.
PEG Ratio
When adjusting for growth, CAVA's PEG of -23.93 indicates potential undervaluation.
Price to Book
The market values CAVA Group, Inc. at 10.43 times its book value. This suggests the stock is fully valued or overvalued on an asset basis.
EV/EBITDA
Enterprise value stands at 53.68 times EBITDA. This signals the market has high growth expectations.
How Well Does CAVA Make Money?
Net Profit Margin
For every $100 in sales, CAVA Group, Inc. keeps $12.14 as profit after all expenses.
Operating Margin
Core operations generate 4.98 in profit for every $100 in revenue, before interest and taxes.
ROE
Management delivers $18.69 in profit for every $100 of shareholder equity.
ROA
CAVA Group, Inc. generates $10.40 in profit for every $100 in assets, demonstrating efficient asset deployment.
Following the Money - Real Cash Generation
Operating Cash Flow
CAVA Group, Inc. produces operating cash flow of $174.43M, showing steady but balanced cash generation.
Free Cash Flow
CAVA Group, Inc. generates weak or negative free cash flow of $25.39M, restricting financial flexibility.
FCF Per Share
Each share generates $0.22 in free cash annually.
FCF Yield
CAVA converts 0.32% of its market value into free cash.
Financial Ratios Analysis
Valuation Ratios
P/E Ratio
Price to earnings ratio
58.36
vs 25 benchmark
PEG Ratio
Price/earnings to growth ratio
-23.93
vs 25 benchmark
P/B Ratio
Price to book value ratio
10.43
vs 25 benchmark
P/S Ratio
Price to sales ratio
7.09
vs 25 benchmark
Financial Health
Debt/Equity
Total debt to shareholders' equity
0.58
vs 25 benchmark
Current Ratio
Current assets to current liabilities
2.69
vs 25 benchmark
Efficiency Ratios
ROE
Return on equity percentage
0.19
vs 25 benchmark
ROA
Return on assets percentage
0.10
vs 25 benchmark
ROCE
Return on capital employed
0.05
vs 25 benchmark
How CAVA Stacks Against Its Sector Peers
| Metric | CAVA Value | Sector Average | Performance |
|---|---|---|---|
| P/E Ratio | 58.36 | 25.25 | Worse (Expensive) |
| ROE | 18.69% | 1170.00% | Weak |
| Net Margin | 12.14% | 742.00% | Weak |
| Debt/Equity | 0.58 | 0.77 | Strong (Low Leverage) |
| Current Ratio | 2.69 | 9.19 | Strong Liquidity |
| ROA | 10.40% | -6467.00% (disorted) | Strong |
CAVA outperforms its industry in 3 out of 6 key metrics, particularly excelling in ROA, but lagging in P/E Ratio.
Historical Growth Performance
5-Year Growth Trajectory
This section reviews CAVA Group, Inc.'s 5-year compound annual growth rate (CAGR) and compares its performance against the typical investment style of its industry.
Revenue CAGR
91.52%
Industry Style: Cyclical, Growth, Discretionary
High GrowthEPS CAGR
446.36%
Industry Style: Cyclical, Growth, Discretionary
High GrowthFCF CAGR
4616.32%
Industry Style: Cyclical, Growth, Discretionary
High Growth