CAVA Stock Slips 23% in a Month: Should Investors Buy the Dip or Wait?

Core Insights - CAVA Group, Inc. (CAVA) shares have decreased by 23% over the past month, underperforming both the Zacks Retail-Restaurants industry and broader market indices [1][8] - Investor sentiment has been negatively impacted by weaker same-restaurant sales growth, the overlap with last year's successful steak launch, and a challenging macroeconomic environment [2][11] - Rising operating costs, particularly in food and beverage, have added pressure on profitability, despite some offset from higher sales and cost management [13] Financial Performance - CAVA's stock is currently trading below its 50-day moving average, indicating a bearish trend [6][8] - The Zacks Consensus Estimate for CAVA's 2025 earnings per share (EPS) has decreased from 58 cents to 56 cents over the past 60 days, contrasting with increases for industry peers [19] - CAVA's forward 12-month price-to-sales (P/S) ratio stands at 5.77, significantly higher than the industry average of 3.78 [23] Growth Potential - Despite current challenges, CAVA shows strong new restaurant performance, with the 2025 class opening above expectations and targeting average unit volumes exceeding $3 million [15] - The company plans to roll out chicken shawarma nationally and is testing new seasonal items to drive demand [16] - Investments in digital engagement, including a new tiered loyalty program, aim to enhance customer relationships and engagement [17] Operational Initiatives - CAVA is implementing technology upgrades under the Connected Kitchen platform to improve operational efficiency and consistency [18] - Management is focused on maintaining margin discipline while scaling operations, which is crucial for navigating near-term volatility [27]