The Motley Fool on $CAVA (Nov 5, 2026)
CAVA is priced too aggressively: at around 100 times earnings, even doubling its restaurant base by 2032 would leave it pretty pricey, and same-store sales growth slowed from 9% to 3% with guest traffic flatlined, price increases carrying a ceiling, and restaurant-level margin slipping, though revenue still grows 20-30%.
Jump to any passage
shares of Cababa are down about 10% as we're uh recording Now these are both relatively fast growing quickserve restaurants. uh good scale. The the the economics of this particular business model are for both of them look pretty good.
And so seeing these stock uh drops that we're seeing today, is this another case of both of these companies not necessarily meeting lofty expectations for their respective stocks?
Cabba's same store sales went from 9% to 3% uh in terms of growth over the past year.
it's less tempting to drive to Cava for lunch when I can just make my lunch downstairs because gas prices are you know $5 a gallon.
to be fair, both of these companies are still doing great considering the environment. Both are still growing revenue in the 20 to 30% range. They were just priced a little bit too aggressively for the uncertainty we're seeing in the in the economy right now.
same store sales still up at both companies. However, the guest traffic has pretty much flatlined for both. the gains are coming from price increases that does have a ceiling especially in this environment
investors are looking at this thing Cabba just hitting a milestone opening its 500th restaurant this is where the growth is mostly coming from these new locations that's good restaurant level profit margin down a little bit for Cabba that's a little bit troubling
I will say right now you look at Cava still trading at around a 100 times earnings, maybe doubling the size of its restaurant base between now and 2032. That's pretty pricey.
Same with Cabba. I mean, they're still growing same store sales, not not like they once were. They're still growing revenue in a tough environment. I assume they're going to be opportunistic until they have a real reason not to be. And I don't see it yet.
I would say that Dutch Bros has a less complex business to run than something such as a Cabba because I mean it's a beverage. It's a beverage company. That's a pretty easy menu to execute.
So I would say that the advantage goes to Dutch Bros here.