CAVA Analysis: CAVA Group's 20% Post-Earnings Rally Confronts a Valuation Reality Check
CAVA Group (NYSE: CAVA) has surged roughly 20% over the past week following its Q4 2025 earnings report, pushing shares to $82.47 — nearly double the 52-week low of $43.41 set earlier in the year. The Mediterranean fast-casual chain has become one of the most closely watched growth stories in the restaurant sector, drawing inevitable comparisons to Chipotle's early-stage trajectory. But beneath the headline rally lies a more nuanced picture. Q4 same-restaurant sales growth decelerated to just 0.5%, a sharp slowdown from the high-single-digit pace investors had grown accustomed to. Revenue for the quarter came in at $275.0 million with a net loss of $0.18 per share, as the company invested heavily in new unit openings. Management guided for 3-5% same-restaurant sales growth in 2026 — well below the torrid pace that initially captivated Wall Street. With a market capitalization of $9.57 billion and a trailing P/E ratio of 72.3x, CAVA is priced for a growth story that hasn't fully materialized in the recent quarters. The question for investors: is the unit-expansion thesis enough to justify the premium, or has the market gotten ahead of itself?