CAVA: Valuation
Lightning Round
I’m on the hunt for my next company to follow. I ate at CAVA earlier this week, so figured this was the perfect stock to dive into next.
To explore more companies that I’ve covered, check out the full Corporate Valuation Catalog
Business Overview
CAVA Group, Inc. is a fast-casual restaurant chain specializing in authentic Mediterranean cuisine through a customizable menu of bowls and pitas. Think Chipotle, but for Mediterranean food.
They formerly owned and operated Zoe’s Kitchen restaurants. As of the end of 2023, CAVA completed the transition, converting all Zoe’s Kitchens to their flagship CAVA chain.
Valuation Drivers
For a restaurant chain like CAVA, there are really only two avenues to grow earnings.
One option is to make (and keep) more money per store. This could come in the form of raising prices, lowering costs, selling more items per customer, attracting more customers per location, etc.
The other option is to simply open more stores and rely on the unit economics and return on invested capital rates to create shareholder value.
I will mostly focus on the latter as that is will be CAVA’s primary driver for the foreseeable future.
CAVA currently operates 415 locations as of the end of Q3, 2025. They have aspirations to reach more than 1,000 stores by the end of 2032:
“We are in the early stages of fulfilling our total restaurant potential, and we believe there is opportunity for more than 1,000 CAVA restaurants in the United States by 2032”
~ Q3, 2025 10-Q
Unit Economics
Store level unit economics basically break down as follows:
AUV (average unit volume) represents the total per-store revenue seen in a given year. Occupancy is primarily tied to operating leases. The rest of the components are relatively self explanatory. I’ve added G&A for the purposes of this analysis - CAVA reports G&A (General & Administrative expenses - i.e., executive and HR salaries) at the corporate level, but it seems that there is some level of overhead that scales with the number of stores in the portfolio, indicating that G&A isn’t a truly fixed cost.
