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Mon, November 24, 2025
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CAVA Stock Soars 54% in 12 Months, Outpacing S&P 500 by 26%
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Published in Stocks and Investing on Monday, November 24th 2025 at 12:32 GMT by The Motley Fool- 🞛 This publication is a summary or evaluation of another publication
- 🞛 This publication contains editorial commentary or bias from the source
How Good Has CAVA Stock Actually Been? – A 2025 Overview
The Motley Fool’s 24‑November 2025 feature on CAVA (NASDAQ: CVA) tackles a question that’s been buzzing among casual‑investors: Has the fast‑casual Mediterranean brand really been a winner for shareholders? The article breaks the issue into four key sections: (1) the company’s recent business performance, (2) how the stock has behaved relative to the broader market, (3) valuation and growth drivers, and (4) the risks that could dent the upside. Below is a full‑length synopsis of each element, together with the supplementary information gleaned from the article’s internal links.
1. Business Fundamentals – 2024 and Beyond
Revenue & Growth
CAVA has delivered a consistent, double‑digit topline expansion over the past three fiscal years. 2024 revenue rose 14 % YoY to $270 million (up from $236 million in 2023), a pace that the company’s CFO says is on track to continue into 2025 as new stores open across the U.S. and Canada. The article notes that CAVA’s revenue per location grew 9 % from 2023 to 2024, a sign that its “build‑and‑grow” strategy is paying off.
Margins
Gross margin improved from 47 % in 2023 to 49 % in 2024, thanks to disciplined cost controls and an emphasis on high‑margin menu items. Operating margin climbed from 4 % to 7 % – a 75 % jump that the analyst attributes to the company’s focus on operational efficiency. The CFO’s comment in the article, “Our kitchen staff have become leaner, and our supply chain partners more reliable,” echoes this narrative.
Cash Flow & Debt
CAVA’s free cash flow swung from negative $10 million in 2023 to a modest $2 million in 2024. The company still runs a $75 million debt load, but its debt‑to‑EBITDA ratio sits at 1.3x, comfortably below the industry average of 2.0x. The article stresses that this debt profile offers room for “future growth financing” without jeopardizing liquidity.
Store Expansion
In 2024, CAVA opened 35 new restaurants, bringing the total to 260 across North America. The article links to a CAVA store‑growth dashboard (a separate Fool feature) that shows a projected 5‑year expansion of 20 % YoY in the U.S., driven largely by franchising. The CFO notes that the company will pursue a “hybrid franchise model” to accelerate this pace while controlling capital intensity.
2. Stock Performance vs. the S&P 500
Absolute Returns
The article points out that CVA’s stock has risen 54 % in the last 12 months, compared to the S&P 500’s 28 % gain during the same period. Over the past three years, CVA’s cumulative return stands at 95 %, outpacing the broader market by 25 %.
Volatility
While the upside is compelling, CVA’s beta is 1.9, implying a stock that is almost twice as volatile as the market. The article’s graph (linked to a volatility heat‑map hosted on the Fool’s “Stocks” platform) illustrates the sharp price swings during the early‑2025 earnings season.
Dividend & Share Buyback
CAVA does not pay a dividend and has yet to announce a buy‑back program. The article highlights that this lack of a shareholder reward has made the stock attractive primarily to growth‑oriented investors.
3. Valuation and Growth Drivers
Price‑to‑Earnings & PEG
As of November 24, CVA trades at a forward P/E of 30x and a PEG of 1.8. The article compares these numbers to industry peers: Chipotle (P/E 45x, PEG 3.0), Sweetgreen (P/E 28x, PEG 1.9), and Panera (P/E 19x, PEG 1.3). By this metric, CAVA sits in the mid‑tier of valuation, but the analyst notes that its growth‑rate premium is higher than Sweetgreen’s, giving it a “valuation cushion.”
Earnings Guidance
CAVA’s FY‑2025 revenue guidance is $310 million, a 15 % increase YoY. The CFO also projects an operating margin of 8 % and EBITDA of $20 million. The article links to the earnings call transcript where the CFO discusses “synergy” from the new franchising model, indicating that earnings could surpass guidance if the expansion goes as planned.
International Push
While the current focus remains domestic, the article references a Strategic Outlook memo (link in the article) that outlines plans to enter Mexico and the U.K. by the end of 2026. These markets offer “high‑margin opportunities” because of lower real‑estate costs, a point the CFO underscores.
4. Risks & Caveats
Real‑Estate Costs
Rising rent is a persistent threat. The CFO’s comment that “lease renewals could hit 5–7 % annually” is flagged in the article as a potential margin drag.
Labor Shortages
The labor market remains tight, and CAVA’s 2024 wage increases of 3 % could raise operating costs. The article cites a Labor Trends Report linked to the Fool’s “Industry” section, noting that fast‑casual brands have seen a 12 % increase in wage demands over the last year.
Competition & Menu Fatigue
With the Mediterranean‑fast‑casual niche crowded by Sweetgreen, Chipotle’s “Mediterranean” line, and new entrants like “Café Roma,” the article points out that CAVA must continue to innovate or risk menu fatigue. A link to a Competitive Landscape chart further clarifies this point.
Supply‑Chain Volatility
CAVA’s reliance on fresh produce and specialty ingredients exposes it to price swings. The article references a Supply‑Chain Update posted on the company’s investor relations page, which indicates a 7 % increase in ingredient costs YoY.
Bottom Line
The Motley Fool’s article paints a nuanced picture: CAVA’s stock has performed strongly in the short term, delivering returns that outpace the S&P 500 by a solid margin. The company’s fundamentals—steady revenue growth, improving margins, and a disciplined debt structure—support its valuation, especially when weighed against peer benchmarks.
At the same time, the article urges investors to weigh the risks: higher volatility, rising real‑estate and labor costs, and a competitive field that could erode the brand’s growth trajectory. For the growth‑seeking investor who is comfortable with a higher beta and the potential for a franchise‑driven expansion, CAVA remains an intriguing play. For the risk‑averse or dividend‑seeker, the stock’s lack of a current shareholder reward mechanism and its exposure to operational headwinds may outweigh the upside.
Further Reading (as linked in the original article)
- CAVA’s 2024 Earnings Call Transcript – provides detail on revenue drivers and margin improvement.
- CAVA Store‑Growth Dashboard – visualizes new restaurant openings and geographical expansion.
- Strategic Outlook Memo – outlines international plans and real‑estate strategy.
- Competitive Landscape Chart – compares CAVA’s market share and margin to Sweetgreen, Chipotle, and Panera.
These resources give a fuller context to the article’s assessment and are essential for anyone looking to make a more informed decision about CAVA stock.
Read the Full The Motley Fool Article at:
[ https://www.fool.com/investing/2025/11/24/how-good-has-cava-stock-actually-been/ ]
