CAVA Group, Inc.
CAVA Group, Inc. Fundamental Analysis
CAVA Group, Inc. (CAVA) shows weak financial fundamentals with a PE ratio of 147.73, profit margin of 5.40%, and ROE of 8.43%. The company generates $1.2B 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 55.5/100 based on profitability, valuation, growth, and balance sheet metrics. The C grade reflects average fundamentals, with notable risks in certain areas.
Fundamental Health Score
We analyze CAVA's fundamental strength across five key dimensions:
Efficiency Score
WeakCAVA struggles to generate sufficient returns from assets.
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
WeakCAVA struggles to sustain strong margins.
Key Financial Metrics
Is CAVA Expensive or Cheap?
P/E Ratio
CAVA trades at 147.73 times earnings. This suggests a premium valuation.
PEG Ratio
When adjusting for growth, CAVA's PEG of -2.73 indicates potential undervaluation.
Price to Book
The market values CAVA Group, Inc. at 12.08 times its book value. This suggests the stock is fully valued or overvalued on an asset basis.
EV/EBITDA
Enterprise value stands at 61.47 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 $5.40 as profit after all expenses.
Operating Margin
Core operations generate 6.73 in profit for every $100 in revenue, before interest and taxes.
ROE
Management delivers $8.43 in profit for every $100 of shareholder equity.
ROA
CAVA Group, Inc. generates $4.69 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 $185.37M, showing steady but balanced cash generation.
Free Cash Flow
CAVA Group, Inc. generates weak or negative free cash flow of $26.22M, restricting financial flexibility.
FCF Per Share
Each share generates $0.23 in free cash annually.
FCF Yield
CAVA converts 0.28% of its market value into free cash.
Financial Ratios Analysis
Valuation Ratios
P/E Ratio
Price to earnings ratio
147.73
vs 25 benchmark
PEG Ratio
Price/earnings to growth ratio
-2.73
vs 25 benchmark
P/B Ratio
Price to book value ratio
12.08
vs 25 benchmark
P/S Ratio
Price to sales ratio
8.006
vs 25 benchmark
Financial Health
Debt/Equity
Total debt to shareholders' equity
0.60
vs 25 benchmark
Current Ratio
Current assets to current liabilities
1.74
vs 25 benchmark
Efficiency Ratios
ROE
Return on equity percentage
0.08
vs 25 benchmark
ROA
Return on assets percentage
0.05
vs 25 benchmark
ROCE
Return on capital employed
0.07
vs 25 benchmark
How CAVA Stacks Against Its Sector Peers
| Metric | CAVA Value | Sector Average | Performance |
|---|---|---|---|
| P/E Ratio | 147.73 | 23.49 | Worse (Expensive) |
| ROE | 8.43% | 1160.00% | Weak |
| Net Margin | 5.40% | 672.00% | Weak |
| Debt/Equity | 0.60 | 0.73 | Neutral |
| Current Ratio | 1.74 | 2.56 | Neutral |
| ROA | 4.69% | -8277.00% (disorted) | Weak |
CAVA outperforms its industry in 0 out of 6 key metrics, 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