CAVA Group in Three Words: Mediterranean Fast Casual

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Background

CAVA appears to be following much of the same Chipotle playbook: similarly promoting restaurant managers from within, introducing new menu items in trial markets, offering second lanes for placing digital orders, and even sticking to fundamental pillars and strategies to guide the culture.

Being the second-mover and learning from its larger rival has its advantages. CAVA's restaurant-level margin of 26% is already nearly at parity with Chipotle's (27.4%), and its 37% of sales it derives digitally are even greater. Perhaps diners are willing to pay a premium for CAVA's Mediterranean cuisine over burrito bowls; affording it the luxury of higher prices and higher margins.

At the corporate level, CAVA is generating a very healthy 16% operating cash flow margin. Its primarily using its cash to open new restaurants as it continues its Westward expansion. Its 398 current locations represent it is around 40% of the way to its stated goal of 1,000 American locations.

With a market cap of $8 billion, investors are valuing each of CAVA's 398 locations at around $20 million apiece. That's a premium as compared to Chipotle, though CAVA's $2.5 million of annual sales per location could still have room to grow.

Conviction Rating Changes

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CAVA Group AI initially joined the 7investing Watch List of New Ideas in August 2025.