Cava: So They’re Expanding. Fine.

Okay, so Cava Group (CAVA 2.97%) had a decent quarter. Shares jumped, which, honestly, is irritating. It’s always irritating when something jumps. Like, what did they do? Up 45% year-to-date, they say. But down 15% over the last year? So, they’re just… recovering? It’s a whole thing. A whole, messy thing. I swear, people get excited about nothing.

Let’s dissect this, because, frankly, I have nothing better to do. And because the sheer audacity of restaurant stock valuations is… well, it’s something.

An “Upbeat” Outlook

2025 was apparently a tough year for Cava stock. They claim it was because of the “lapping” of the grilled steak option. Lapping? What does that even mean? It sounds like a dog is involved. Anyway, sales slowed. And now they’re forecasting 3% to 5% growth. 3 to 5 percent! It’s barely noticeable. They’re making it sound like a monumental achievement. And after reporting a 0.5% increase in Q4? Seriously? It’s like they’re trying to spin nothing into gold.

Overall revenue was up 21% to $272.8 million. Fine. They opened 24 new restaurants, bringing the total to 439. More restaurants. Great. More lines. More noise. They’re expanding into the Midwest – Cincinnati, St. Louis, Columbus, Minneapolis. As if those cities are clamoring for another Mediterranean chain. It’s just… a lot. And they want to hit 1,000 locations by 2032? That’s… ambitious. Or delusional. Probably delusional.

Restaurant-level margins dropped from 22.4% to 21.4%. A whole percentage point! They’re acting like it’s negligible. It’s not negligible! It’s a downward spiral, I tell you! A downward spiral! They expect 23.7% to 24.2% in 2026. Such precision. It’s unnerving. And adjusted EBITDA rose 3% to $25.8 million. Okay. Good for them. I guess.

Is the Stock Still a Buy?

They boast about “robust average unit volumes” of nearly $3 million. And they compare themselves to Chipotle. Chipotle! That’s like comparing a reasonably priced burrito to… well, to whatever Cava is. It’s not the same. And they have fewer than 450 locations, which they call an “expansion story.” It’s a proliferation, is what it is. A relentless, unstoppable proliferation of hummus and pita.

Here’s where it gets truly infuriating. They have a market cap of $9.8 billion and 439 locations. That values each location at $22.3 million. $22.3 million per restaurant! For a place that serves glorified salad bowls! It’s madness! Pure, unadulterated madness! You could buy a small island for that amount! A whole island! And you wouldn’t have to wait in line for a scoop of tzatziki.

Look, I’m not saying it’s a terrible business. But the valuation? It’s… irresponsible. It’s a bubble waiting to burst. A very, very annoying bubble. I’m staying far, far away. I have standards, you know. And a deep, abiding need for rational pricing. Is that too much to ask?

2026-02-28 21:12

An “Upbeat” Outlook

Is the Stock Still a Buy?

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