CAVA stock: do Q4 earnings justify its premium multiple?

In a market increasingly skeptical of high-growth valuation, CAVA Group Inc (NYSE: CAVA) has managed to turn the tide.

Following its Q4 2025 earnings release on February 24th, the Mediterranean fast-casual darling saw its shares surge over 20%, defying the gravity of its premium multiple.

For months, critics pointed to the firm’s high price-to-earnings ratio as a sign of overextension.

However, the latest quarterly report suggests CAVA is not just growing; it’s scaling with a level of operational discipline that justifies investor optimism.

With revenue crossing the $1 billion milestone for the first time, the question is no longer whether CAVA stock is expensive, but whether its growth runway remains clear enough to support a soaring trajectory.

Stifel sees further upside in CAVA stock

Stifel was quick to validate the market’s enthusiasm, raising its price target on CAVA shares to $90 while maintaining a resolute “buy” rating.

According to its managing director Chris O’Cull, the NYSE-listed firm’s performance reflects a “differentiated, craveable Mediterranean cuisine” that’s capturing market share from legacy fast-casual names.

His constructive view is rooted in CAVA’s ability to exceed expectations during a period of macro volatility.

O’Cull highlighted that “underlying demand remains healthy,” despite sector-wide weakness seen recently, and emphasized the firm’s investment in infrastructure, specifically the Assistant General Manager program, is a “necessary step to support mid- to high-teens unit growth going forward.”

Innovation to drive CAVA shares higher

While the headline revenue beat of $275 million was “impressive”, the real story for CAVA stock lies in the “Project Soul” redesign and the company’s aggressive menu innovation.

CAVA Group Inc is pivoting from a newly public entity to what CEO Brett Schulman calls a “large-scale, sustainable growth enterprise”.

This shift is evidenced by the upcoming Q1 launch of “Pomegranate-glazed Salmon” – the brand’s first foray into seafood, aimed at broadening consumer base and increasing average cheque sizes.

Furthermore, the full-year guidance of 3% to 5% same-store sales growth suggests management is confident in its “everyday value” positioning, having taken significantly smaller price increases than its peers in 2025 to maintain guest frequency.

A 1,000-unit vision within reach

The most compelling tailwind for CAVA shares remains the company’s massive “white space” for expansion.

Ending 2025 with 439 locations, the restaurant chain is on a clear path toward its target of 1,000 restaurants by 2032.

Management’s plan to open “up to 76 new units” in 2026 – many of them in the untapped Midwest markets – underscores a “playing aggressive offense” strategy.

Analysts have been particularly impressed by new restaurant productivity, which continues to trend above 100% of average annual volumes.

With a digital revenue mix holding steady at nearly 39% and a “reimagined” loyalty programme approaching 8 million members, CAVA is building a tech-enabled moat.

This combination of unit growth, digital prowess, and menu evolution signals that the premium multiple reflects a rare “category-defining” asset in the restaurant space.

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