Cava Group's High Revenue Growth Attracts Analyst Praise, Stocks Jumps 10%

Shares of Cava Group Inc CAVA were up almost 10% during early trading on Monday, after its IPO last month that saw a nearly 100% return.

The company has high average unit volumes (AUVs) and generated a 44% revenue CAGR (compounded annual growth rate) in the five years through 2022, according to William Blair.

The Cava Group Analyst: Sharon Zackfia initiated coverage of Cava Group with an Outperform rating.

The Cava Group Thesis: The company could finish 2023 with three times the number of locations that it had in 2020, Zackfia said in the initiation note.

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“Key to the company’s success is its broad demographic appeal, including relatively balanced strength across income levels, generations, and gender, translating to consistently healthy results across geographies,” the analyst wrote.

“CAVA accelerated its growth following the 2018 acquisition of Zoës Kitchen, which provided immediate access to attractive real estate in new markets while enabling capital-efficient densification in top-tier trade areas,” she added.

CAVA Price Action: Shares of Cava Group were up 10.3% to $43.70 at the time of publication on Monday.

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