CAVA Earnings: Shares Plummet despite Strong Q1 Results – TipRanks.com

Shares of Mediterranean restaurant operator CAVA Group (NYSE:CAVA) fell in after-hours trading after the company reported earnings for its first quarter of Fiscal Year 2024. Earnings per share came in at $0.12, which beat analysts’ consensus estimate of $0.04 per share.

In addition, sales increased by 27.5% year-over-year, with revenue hitting $259.01 million. This also beat analysts’ expectations of $245.5 million. The increase in revenue was driven by Same-Restaurant Sales growth of 2.3% and 14 net new restaurant openings, which brings the total to 323 locations and equates to a 22.8% year-over-year increase.

Looking forward, management raised its guidance and now expects Same Restaurant Sales growth and adjusted EBITDA for FY 2024 to be in the ranges of 4.5% to 6.5% (up from 3% to 5%) and $100 million to $105 million (up from $86 million to $92 million), respectively. For reference, analysts were expecting an adjusted EBITDA of $92.02 million.

Investor Sentiment for CAVA Stock Is Currently Very Positive

The sentiment among TipRanks investors is currently Very Positive. Out of the 736,443 portfolios tracked by TipRanks, 0.3% hold CAVA stock. In addition, the average portfolio weighting allocated towards CAVA among those who do have a position is 5.59%. This suggests that investors of the company are fairly confident about its future.

In addition, in the last 30 days, 5.3% of those holding the stock increased their positions. As a result, the stock’s sentiment is above the sector average, as demonstrated in the following image:

What Is the Future Price of CAVA Stock?

Turning to Wall Street, analysts have a Strong Buy consensus rating on CAVA stock based on six Buys, two Holds, and zero Sells assigned in the past three months, as indicated by the graphic below. After a 116% rally in its share price over the past year, the average CAVA price target of $75 per share implies 8.81% downside risk. However, it’s worth noting that estimates will likely change following today’s earnings report.