Why Cava Group Stock Jumped 162% in 2024 but Is Down 24% From Its Peak

Group 1: Company Performance - Cava Group's stock rose 162% in 2023, making it a top performer in the consumer discretionary sector, although it has recently declined [2] - The company went public in June 2023 and experienced significant growth, with double-digit comparable-store sales growth and improving profit margins [3][4] - Revenue for the first three quarters of 2024 increased by 33.5% to $736.3 million, with an 18.1% rise in comparable sales in Q3, including a 12.9% increase in guest traffic [4] Group 2: Growth Potential - Cava currently operates 352 restaurants and aims to expand to over 1,000 by the end of the decade, potentially reaching 3,000 locations if it follows Chipotle's trajectory [5] - The average unit volume for Cava is $2.8 million, comparable to Chipotle's performance [5] Group 3: Valuation and Market Sentiment - Following a peak after the Q3 earnings report, Cava's stock has fallen 24%, with a current price-to-sales ratio of 15 and a price-to-earnings ratio near 300 [6][7] - The market correction reflects concerns about sustaining double-digit comparable sales growth in a consumer-driven business [7] - Looking ahead to 2025, expectations for Cava's performance will be higher than in the previous year [8]