This is Why Cava Stock Is EXPLODING Higher...And Why I'm Not Adding

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👨‍💼Brian Stoffel is a writer, investor, YouTuber, and financial educator. He's a teacher at heart. Brian has been investing for over a decade and has written over 4,000 articles for The Motley Fool. Brian plans his life and his investments around “antifragile” principles.

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[andreivoicu]

Too overvalued for my taste, like Celsius was when you made a video about them. Otherwise, just want to let you know that I love watching your channel and you're doing a wonderful job. I would like to know your thoughts about Inmode (INMD), a wonderful small cap business affected by the high rates but which will soar very soon once FED will cut the rates.

[jasonzola]

Cava is insanely valued. It is a restaurant, single digit margins! Priced at 13x sales. This is about double McDonalds who also have 5x the margins at 25%. So you are paying 10x.

It is currently priced to utter perfection as you said. Any hiccup will wreck it

[keithb]

"CAVA is expensive." Tell me something I don't know. If I was worried about paying a premium, I would have sold at $50. I'm own them for the story they will tell tomorrow.

[nicky_rads]

They have a really good product, good to see the management team expanding the operation as well !

[rtorcato]

nobody cared about Zoe's kitchen, but now it's called Cava and investors are going crazy.

[EarthwithTom]

Long time follower here Brain’s - is there a way we can submit a stock for you to review? I’m sure you get a lot of requests but it would be cool if from time to time you review subscriber or member requested stocks

[themusic]

Never really been a fan of restaurant stocks….low margins, high capex, not much moat and consumers change their tastes and preferences frequently. You’re very much dependent on A1 marketing and branding catching on at the right time to the right audience. I’d probably invest in Dutch Bros before Cava though

[leweezo]

I ahve a few shares.. I guess I will buy on any market pullback this fall

[modernsoccer]

I missed out on a lot of good ipo stocks because they said it was expensive but i look at some of them after 5 yrs and they have delivered great numbers so I'm not listening to anyone on cava, they keep expanding and sometimes that's all you need in a restaurant stock, the early expansion phase could make the stock go wild for 5 to 10 yrs before reality sets in

[jerryhunter]

Brian,
Can’t wait to get the membership for your new service. When?

[GuyCo]

I think that Portillo's (PTLO) is way more attractive at its current valuation. It was IPO's too high in 2021, but now is traded way too low... There is an artificial increase in Class A outstanding shares over the last couple of years which is depressing the share price, but the overall count of Class A+B hasn't changed. This is CAVA 3 years ago or CMG 7 years ago.

[azulsimmons]

I like the business plan and that type of food, but that is a crazy valuation.

[abidingdude]

Great analysis and I'm with you, I'm really excited about this company and its growth potential. There still aren't any locations around me so I've not gotten to try it.

[gerard]

If I compare it to Texas roadhouse it's just so highly valued...

[KennonLive]

This type of restaurants if theres a recession, even if a mild one, the margin will get annihilated.

[GaryKarr]

Holy moly ... I'm thinking that perhaps they are right now in that perfect sweet spot between fast food and in-person dining. Still lot of a pressure to deliver at that price level, but if they keep expanding and keep focus on quality and service delivery (don't let a Panera "mosh pit" scenario develop), they might have quite a long runway of growth.

[darrenprior]

after today's bounce the market is pricing each restaurant at around $41m per store. In what world is that rational? Even if they quadruple the store count and the shares remain flat that's still pricing each store at $10m. I'm sorry but I don't get that valuation. Please tell me what I'm missing and why I'm so stupid.

[JD-imwu]

the most complicated and also most rewarding investment skill is to predict future earnings growth for growing companies.

[jasonzola]

Cava is insanely valued. It is a restaurant, single digit margins! Priced at 13x sales. This is about double McDonalds who also have 5x the margins at 25%. So you are paying 10x.

It is currently priced to utter perfection as you said. Any hiccup will wreck it