Coffee (Nyse: Cava) Recently, she has been one of the most impressive stories in the restaurant industry.
After embarking on a trembling start after his IPO in June 2023, the stock rose through most of the 2024 years, as it brought the results of a blockbuster with a quick growth on the upper line and expanding margins at the bottom of the line, indicating a strong demand for the Mediterranean rapid chain.
Cava only limited revenue growth annually to $ 35.1% to $ 954.3 million, which encouraged 58 new restaurant openings and sales growth at the same store of 13.4%. The average amount of units or average stores per store increased from $ 2.6 million to $ 2.9 million, which shows that new stores produce strong results and that the Comp sale has an impact. This led to a profit increase, with adapted earnings before interest, tax, depreciation and depreciation (depreciation (EBITDA) an increase of 71% from $ 73.8 million to $ 126.2 million.
Despite the strong recent results, the shares have fallen after each of the last two earnings reports, and is now reduced by 44% of its peak. Is the stock shopping? Let’s see what Cava can offer to investors today.
The Cava record is certainly impressive, but the question for investors is at the moment whether it can retain that growth, because the shares of prices are based on future cash flows.
Looking at 2025, Cave guidelines required slowdown in comparable sales growth at 6%-8%. It also predicts 62-66 restaurant openings, adjusting EBITDA of $ 150 million to $ 157 million, or 22% of the growth in the middle. The administration sees a profit margin at a restaurant level of 24.8%-25.2%, which is flat compared to 25%in 2024.
Investors should take this prognosis with grain of salt, as initial guidelines for the whole year are often conservative, especially for growth supplies like Cave. After all, the administration wants to be sure it can hit those numbers. The worst thing that can happen for growth stocks is to reduce your year -round guidelines.
However, there is a reason to believe that Cava can surpass this forecast and continue strong growth in the years to come.
First, the company easily surpassed its initial guidelines in 2024. A year ago, the administration called for a comparable sale of only 3%-5%, adjusted EBITDA of $ 86 million-92 million, and a profit margin at a restaurant level of 22.7%-23.3%. He easily beat all these numbers.
The company also brings a strong momentum to the New Year, as comparable sales have jumped 21.2%in the fourth quarter, indicating that it should start in 2025. With strong growth comparable sales, as it would be unusual for that growth to disappear in one quarter. In addition, Cava still has a lot of room for growth, finishing a quarter with 367 locations across the country. According to its forecast, this year will increase the trade base by 18%, and the company expects to have at least 1,000 restaurants by 2032, double the number of stores.
