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2 Growth Stocks Down 50% to Buy Right Now
The Motley Fool· 2025-04-01 08:10
With the S&P 500 down five of the last six weeks, investors seem to fearing the worst. 1. Deckers Deckers (DECK 0.33%) might be the most overlooked stock in the footwear and apparel industry. Even after the stock just fell by 50%, shares are still up more than 800% over the last decade. Deckers owns two of the strongest growth brands in the footwear industry: Hoka and Ugg. Hoka has been grabbing market share in the industry and continues to deliver impressive numbers. In the fiscal third quarter (ended Dec. ...
Cava earns ‘Buy' rating in initial coverage from Bank of America
Proactiveinvestors NA· 2025-03-31 19:49
We are experts in medium and small-cap markets, we also keep our community up to date with blue-chip companies, commodities and broader investment stories. This is content that excites and engages motivated private investors. About this content About Emily Jarvie Emily began her career as a political journalist for Australian Community Media in Hobart, Tasmania. After she relocated to Toronto, Canada, she reported on business, legal, and scientific developments in the emerging psychedelics sector before joi ...
CAVA Can Outgrow Expectations With Strong Unit Economics And Market Headroom, Analyst Says
Benzinga· 2025-03-31 17:56
Core Viewpoint - BofA Securities analyst Sara Senatore initiated coverage on CAVA Group Inc with a Buy rating and a price forecast of $112.00, highlighting the company's strong investment returns and potential for high valuations [1]. Group 1: Financial Performance and Growth Potential - CAVA's stock has declined amid concerns over consumer spending, despite stable overall restaurant demand [2]. - The company has the necessary demand and capacity to increase unit volumes, driven by advertising, menu innovations, and a revamped loyalty program [3]. - CAVA's restaurant margins and returns currently lag behind peers like Chipotle Mexican Grill due to higher labor and occupancy costs, but improved sales volumes are expected to help narrow this gap [4]. Group 2: Expansion Strategy - CAVA aims for 1,000 U.S. locations, but market analysis suggests it could support over 2,200 locations, indicating significant expansion potential [5]. - The company's top 20 markets alone could accommodate more than 1,000 locations, showcasing its growth opportunities beyond current targets [5]. Group 3: Capital Deployment and Market Position - CAVA has the ability to deploy capital at high rates of return for at least a decade, contributing to the positive outlook from analysts [6].
Cava Group Set to Join S&P MidCap 400 and Angi to Join S&P SmallCap 600
Prnewswire· 2025-03-26 21:40
Group 1 - S&P Dow Jones Indices will implement changes to the S&P MidCap 400 and S&P SmallCap 600 indices, effective March 31 and April 2, 2025 respectively [1][4] - Cava Group (CAVA) will be added to the S&P MidCap 400, replacing Altair Engineering (ALTR), which is being acquired by Siemens AG [1][4] - Angi Inc. (ANGI) will be added to the S&P SmallCap 600, replacing The ODP Corp (ODP), as ODP's market capitalization is no longer representative of the small-cap market [1][4] Group 2 - The changes reflect ongoing adjustments in the indices to ensure they accurately represent their respective market segments [1][4] - The acquisition of Altair Engineering by Siemens AG is a significant event leading to its removal from the S&P MidCap 400 [1][4] - The spin-off of ANGI from IAC Inc. is a strategic move that allows ANGI to enter the S&P SmallCap 600 [1][4]
3 Things to Know About Cava Stock Before You Buy
The Motley Fool· 2025-03-26 01:08
Core Viewpoint - Cava Group's stock has experienced significant volatility since its IPO, with a 92% increase from its first-day closing price, but has since dropped 44% from its highs, leading to a more reasonable valuation for potential investors [1] Group 1: Company Performance - Cava has shown impressive growth, with a 28% year-over-year revenue increase to $225 million in Q4 2024, and plans to expand from 367 locations to approximately 431 by 2025 [3] - The company has a strong comparable sales (comps) growth of 21% in Q4 and 13% for the full year, indicating customer retention and spending [6][7] - Despite the positive growth metrics, there are concerns about the sustainability of this growth given the company's relatively small size compared to competitors like Chipotle [4] Group 2: Competitive Landscape - Cava faces competition from established players like Chipotle, which has invested in a competing Mediterranean-style chain, Brassica, and continues to dominate the fast-casual market [5] - The competitive environment necessitates careful analysis of Cava's expansion prospects and market positioning [5] Group 3: Valuation Concerns - Cava's stock is currently trading at a forward P/E ratio of 116, which, while lower than its previous ratio above 240, still indicates a high valuation that relies on continued growth [9] - The company's guidance for 2025 suggests a slowdown in comps growth to 7%, raising concerns about its ability to maintain high valuations without corresponding growth [7][8]
CAVA Stock Falls 29% in 3 Months: Should You Buy, Sell or Hold?
ZACKS· 2025-03-24 16:05
Shares of CAVA Group, Inc. (CAVA) have taken a beating, plunging 29.2% over the past three months, significantly underperforming the Zacks Retail – Restaurants industry’s 0.5% dip. The stock has also lagged the Zacks Retail-Wholesale sector’s and the S&P 500’s decline of 6.1% and 6.6%, respectively.CAVA Three-Month Price PerformanceImage Source: Zacks Investment ResearchAnalysts believe that consumer behavior is becoming increasingly discerning, which could impact growth rates across the industry and presen ...
JPMorgan Backs CAVA's Expansion Potential As Yum! Brands Plans Major Taco Bell, KFC Growth
Benzinga· 2025-03-20 17:22
Industry Overview - Recent volatility in restaurant chain stocks has created "some opportunities" according to JPMorgan [1] - Consumer confidence has dipped, leading to more cautious discretionary spending, yet total industry supply growth remains resilient, up 12% from Q3 2018 to Q3 2024, with a CAGR of approximately 2% [1] CAVA Group - CAVA Group Inc's rating was upgraded from Neutral to Overweight, with a price target established at $110 [2] - The company has significant U.S. expansion potential and is generating free cash flows unusually early, with initiatives in place to drive sales and profits [2][3] - A long-term investment approach is recommended as the company plans to expand from 367 units to over 1,000 units [3] Yum! Brands - Yum! Brands Inc maintains a Neutral rating, with the price target raised from $138 to $160 [4] - The stock increased around 10% following better-than-expected results, with tech-fee recapture now recognized by the broader market [4] - Each $100 million of tech-fee recapture is valued at approximately 28 cents per share, aimed at easing operations for franchisees [4] Growth Projections - Taco Bell US is projected to grow from 7,604 units to 9,000 by 2030, while Taco Bell International could increase from 1,153 to 2,000 units [5] - KFC international (excluding China) is expected to grow from 16,664 to 22,300 units, and KFC China from 11,648 to 19,400 units [5] Stock Performance - CAVA Group shares increased by 5.27% to $85.27, while Yum! Brands shares rose by 0.15% to $157.25 at the time of publication [5]
Down More Than 50% From Its High, Is Now a Great Time to Buy Shares of Cava Group?
The Motley Fool· 2025-03-20 13:15
Mediterranean fast-casual restaurant chain Cava Group (CAVA 5.83%) is a rapidly growing business. It's often compared to Chipotle Mexican Grill, with investors seeing it as the next big growth stock in the restaurant industry. Last year was a stellar one for Cava as its shares skyrocketed 162%. This year, however, has been a far different story. The restaurant's stock has slumped 30% and is now down more than 50% from its 52-week high of $172.43. Is this just a bump in the road for the restaurant stock, and ...
President Trump's Trade War Is Here: Here's How Investors Can Benefit
The Motley Fool· 2025-03-10 13:16
Core Viewpoint - The imposition of tariffs by the Trump administration has led to significant market volatility and concerns about potential economic impacts, prompting investors to seek opportunities in undervalued stocks. Group 1: Tariff Implementation and Market Reaction - The Trump administration has imposed a 25% import tax on all goods from Mexico and Canada, with a 10% tariff on energy products from Canada, and increased tariffs on Chinese goods from 10% to 20% [2] - The S&P 500 index fell 3% in response to the tariff announcements, erasing all post-election gains [4] - Economic indicators show that the tariff threats are affecting job growth, with only 77,000 jobs added in February, significantly below expectations [5] Group 2: Investment Opportunities Amid Tariff Concerns - Long-term investors may find attractive prices on stocks that are less likely to be impacted by tariffs, despite short-term volatility [7] - Cava Group, a fast-casual chain, has seen its stock drop 44% from its peak, despite strong fourth-quarter results, making it a potential buy [8] - Nvidia's stock has decreased by approximately 25% due to trade war concerns, but it remains competitively positioned with a forward price-to-earnings ratio of 26 [9] - Taiwan Semiconductor Manufacturing is trading at a price-to-earnings ratio of 27 and has announced a $100 billion investment in U.S. foundries, which may mitigate tariff disruptions [10] Group 3: Broader Market Trends - The recent pullback in interest rates may benefit dividend stocks, making them more attractive compared to high-yield dividends, favoring utility stocks and real estate investment trusts [12] - The situation regarding tariffs is fluid, with potential changes based on negotiations, as seen with the delay of tariffs on cars from Canada and Mexico [13] - Investors are encouraged to focus on long-term opportunities and high-quality stocks that are likely to withstand temporary trade war headwinds [14]
3 Growth Stocks Down 18% to 43% to Buy Right Now
The Motley Fool· 2025-03-08 13:00
Group 1: Cava Holding (CAVA) - Cava has delivered multi-bagger returns since going public less than two years ago, but its stock has pulled back 43% from its peak due to valuation concerns and macroeconomic issues [2][6] - In Q4, same-store sales increased by 21.2%, and overall revenue rose by 28.3%, indicating strong customer growth and frequency [3] - The restaurant-level profit margin for the full year was 25%, and adjusted EBITDA increased from $73.8 million to $126.2 million [4] - Cava aims to expand from 367 restaurants in 2024 to 1,000 by 2032, indicating significant growth potential [5] Group 2: On Holding (ONON) - On is a young activewear brand experiencing strong growth, with Q4 sales increasing by 41% year over year, driven by a 49% rise in direct-to-consumer sales [8] - The brand has developed a loyal customer base among affluent consumers and is working to expand its market share through partnerships, such as with celebrity Zendaya [9] - Profitability is improving rapidly, with gross margin expanding from 60.4% to 62.1% year over year in Q4, and net income rising by 436% [10] - On stock is currently trading at a reasonable valuation of 33 times forward earnings, presenting an attractive investment opportunity [11] Group 3: Toast (TOST) - Toast is well-positioned to benefit from the growing adoption of cloud-based technology solutions in the restaurant industry, despite a recent 20% pullback from its 52-week high [12] - Revenue based on the annualized recurring run-rate grew by 34% year over year in Q4, serving 134,000 locations with significant room for growth in the U.S. market [14] - The company is expanding its platform capabilities to cater to various service models, enhancing revenue potential from existing customers [15] - Toast has not yet tapped into the global restaurant industry, which includes an estimated 15 million locations, indicating substantial long-term growth potential [16]