CAVA gets a fundamental rating of 5 out of 10. The analysis compared the fundamentals against 132 industry peers in the Hotels, Restaurants & Leisure industry. No worries on liquidiy or solvency for CAVA as it has an excellent financial health rating, but there are worries on the profitability. CAVA is valued quite expensive, but it does show an excellent growth.

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1. Profitability

2. Health

3. Growth

4. Valuation

5. Dividend

1. Profitability

1.1 Basic Checks

CAVA had positive earnings in the past year.
In the past year CAVA had a positive cash flow from operations.

1.2 Ratios

The Return On Assets of CAVA (10.40%) is better than 82.58% of its industry peers.
The Return On Equity of CAVA (17.87%) is better than 75.76% of its industry peers.
Looking at the Return On Invested Capital, with a value of 4.18%, CAVA is in line with its industry, outperforming 47.73% of the companies in the same industry.

		Industry Rank	Sector Rank
ROA	10.4%
ROE	17.87%
ROIC	4.18%

ROA(3y)0.8%

ROA(5y)N/A

ROE(3y)-2.18%

ROE(5y)N/A

ROIC(3y)N/A

ROIC(5y)N/A

1.3 Margins

The Profit Margin of CAVA (12.14%) is better than 78.79% of its industry peers.
CAVA has a Operating Margin (5.44%) which is in line with its industry peers.
CAVA's Gross Margin of 32.01% is on the low side compared to the rest of the industry. CAVA is outperformed by 71.97% of its industry peers.
CAVA's Gross Margin has improved in the last couple of years.

		Industry Rank	Sector Rank
OM	5.44%
PM (TTM)	12.14%
GM	32.01%

OM growth 3YN/A

OM growth 5YN/A

PM growth 3YN/A

PM growth 5YN/A

GM growth 3Y7.15%

GM growth 5YN/A

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ROA

ROE

ROIC

Operating and Profit Margin

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2. Health

2.1 Basic Checks

With a Return on Invested Capital (ROIC) below the Cost of Capital (WACC), CAVA is destroying value.
The number of shares outstanding for CAVA has been increased compared to 1 year ago.
There is no outstanding debt for CAVA. This means it has a Debt/Equity and Debt/FCF ratio of 0 and it is amongst the best of the sector and industry.

2.2 Solvency

An Altman-Z score of 8.91 indicates that CAVA is not in any danger for bankruptcy at the moment.
CAVA's Altman-Z score of 8.91 is amongst the best of the industry. CAVA outperforms 96.97% of its industry peers.
There is no outstanding debt for CAVA. This means it has a Debt/Equity and Debt/FCF ratio of 0 and it is amongst the best of the sector and industry.

		Industry Rank	Sector Rank
Debt/Equity	0
Debt/FCF	0
Altman-Z	8.91

ROIC/WACC0.47

WACC8.9%

2.3 Liquidity

CAVA has a Current Ratio of 2.69. This indicates that CAVA is financially healthy and has no problem in meeting its short term obligations.
CAVA has a Current ratio of 2.69. This is amongst the best in the industry. CAVA outperforms 90.15% of its industry peers.
A Quick Ratio of 2.63 indicates that CAVA has no problem at all paying its short term obligations.
CAVA has a better Quick ratio (2.63) than 90.15% of its industry peers.

		Industry Rank	Sector Rank
Current Ratio	2.69
Quick Ratio	2.63

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WACC

Debt/Equity

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Altman-Z score

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3. Growth

3.1 Past

The Earnings Per Share has grown by an nice 19.57% over the past year.
The Revenue has grown by 23.93% in the past year. This is a very strong growth!
CAVA shows a strong growth in Revenue. Measured over the last years, the Revenue has been growing by 24.44% yearly.

EPS 1Y (TTM)19.57%

EPS 3YN/A

EPS 5YN/A

EPS Q2Q%-20%

Revenue 1Y (TTM)23.93%

Revenue growth 3Y24.44%

Revenue growth 5YN/A

Sales Q2Q%19.86%

3.2 Future

Based on estimates for the next years, CAVA will show a very strong growth in Earnings Per Share. The EPS will grow by 21.46% on average per year.
Based on estimates for the next years, CAVA will show a quite strong growth in Revenue. The Revenue will grow by 19.89% on average per year.

EPS Next Y9.99%

EPS Next 2Y9.63%

EPS Next 3Y16.45%

EPS Next 5Y21.46%

Revenue Next Year21.86%

Revenue Next 2Y21.3%

Revenue Next 3Y20.85%

Revenue Next 5Y19.89%

3.3 Evolution

The Revenue growth rate is stable: in the next years the growth will be about the same than in the last years.

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4. Valuation

4.1 Price/Earnings Ratio

CAVA is valuated quite expensively with a Price/Earnings ratio of 110.22.
60.61% of the companies in the same industry are cheaper than CAVA, based on the Price/Earnings ratio.
CAVA's Price/Earnings ratio indicates a rather expensive valuation when compared to the S&P500 average which is at 28.30.
Based on the Price/Forward Earnings ratio of 102.93, the valuation of CAVA can be described as expensive.
Based on the Price/Forward Earnings ratio, CAVA is valued a bit more expensive than 64.39% of the companies in the same industry.
When comparing the Price/Forward Earnings ratio of CAVA to the average of the S&P500 Index (25.57), we can say CAVA is valued expensively.

		Industry Rank	Sector Rank
PE	110.22
Fwd PE	102.93

4.2 Price Multiples

Compared to the rest of the industry, the Enterprise Value to EBITDA ratio of CAVA indicates a rather expensive valuation: CAVA more expensive than 81.82% of the companies listed in the same industry.
Compared to the rest of the industry, the Price/Free Cash Flow ratio of CAVA is on the same level as its industry peers.

		Industry Rank	Sector Rank
P/FCF	277
EV/EBITDA	51.73

4.3 Compensation for Growth

The high PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates an expensive valuation of the company.
CAVA's earnings are expected to grow with 16.45% in the coming years. This may justify a more expensive valuation.