Since its Initial Public Offering (IPO) at $22 a share on July 29, 2023, the Mediterranean restaurant chain has seen a meteoric rise in its stock price, gaining over 600% in value (currently $147.60) and making news headlines all across the United States, according to The Motley Fool. Its seemingly unstoppable growth has attracted investors from many different industries, and early investors in Cava’s are sure to be satisfied with the returns they’ve made.
Cava Group, Inc. (NYSE: CAVA on the stock market) is a Mediterranean cuisine-based fast-casual restaurant chain structured similarly to well-known competitors such as Chipotle (the extremely similar, Mexican-American competitor to Cava) and Sweetgreen. Cava offers many food products, including curated bowls, pitas, salads, dips, drinks, and even a Chipotle-style “choose your ingredients” option for bowls and sandwiches. Cava’s restaurant chains are famous for their fresh and healthy ingredients, providing a healthier option for food that can be picked up just as quickly as in other fast food restaurants.
On July 29, 2023, Cava Group, Inc. announced its initial public offering at $22 a share. Investors were quick to invest in the promising growth of Cava, raising over $318 million as a whole in their IPO, according to The Motley Fool. As stated by Reuters, Its investors have continued to contribute to the project, raising over $680 million since 2015, with their last major fundraising event coming in 2021. Investor support has been a constant positive in Cava’s expansion thus far, and this is reflected by Cava’s over 300% growth in value in just 2024 alone. Expert analysts of the stock generally agree on a moderate buy rating for CAVA, with a mixture of hold and buy ratings for the stock based on 12-month price predictions.
From an economic standpoint, Cava’s focus on offering health-conscious dining has paid off for them. Targeting a growing market of customers that are increasingly searching for healthier alternatives to fast food has allowed Cava to grow while generating a profit. Its largely successful expansion strategy has focused on rapidly increasing its store count while occasionally acquiring smaller Mediterranean chains. Cava’s plan going into the 2024 fiscal year was to open 50-54 new restaurants, which they have successfully done. Their plans of aggressive growth in mainly coastal areas of the US seem to show no signs of slowing, so expect even more restaurant openings in the 2025 year. One notable acquisition exemplifying Cava’s expansion strategy was the purchase of Zoe’s Kitchen in 2018, which have all now been transformed into Cava restaurants.
This year, Cava clearly demonstrated its potential to grow. Moreover, it faces no direct competitors, as Cava is the first national Mediterranean restaurant brand (being the first to something gives a lot of room to grow!). What’s even more incentivizing for investors, though, is that Cava has only opened 350 locations at the time of writing. For reference, Chipotle has 3,000 locations currently open and it is estimated that it’ll be able to more than double that number to 7,000 locations across the US. This provides a massive growth opportunity for Cava, as, according to Chipotle’s estimates, they have plenty of room to grow in their industry.
Being hailed by many as “the next Chipotle,” Cava has been stealing the spotlight from Chipotle recently in growth. While it is true that Chipotle is a more established brand with many more restaurants to manage (therefore would logically experience less growth year over year), Cava’s growing numbers are impressive. Each of Cava’s stores boast a $2.6 million in annual revenue, a number that is still growing as Cava grows in popularity. Cava has also reported just under $1 billion in revenue during 2024, a figure that is especially impressive due to its restaurant-level profit margin of 25.2%. Cava has been able to grow as a business while self-funding its growth to expand even further, an impressive feat in the resistant restaurant industry. It shows no signs of slowing down.
The nearest Cava restaurant to Tenafly High School is located at the Bergen Town Center in Paramus, NJ. Try it out if you haven’t already!
