Argus Lowers CAVA Group (CAVA) PT to $76 Despite Strong Q2 Revenue Growth

Core Insights - CAVA Group Inc. is considered one of the best IPO stocks to buy and hold for three years despite a recent price target reduction by Argus from $110 to $76 while maintaining a Buy rating [1][3] - The company reported strong financial growth in Q2 2025, with a revenue increase of 20.3% year-over-year to $278.2 million and adjusted EBITDA growth of 22.6% to $42.1 million [2][3] - CAVA opened 16 net new restaurants in Q2, bringing its total to 398 locations, and maintained a restaurant-level profit margin of 26.3% [3] Financial Performance - Revenue for Q2 2025 reached $278.2 million, reflecting a year-over-year increase of 20.3% [2] - Adjusted EBITDA for the same period was $42.1 million, up 22.6% compared to Q2 2024 [2] - Net income for Q2 was reported at $18.4 million, indicating strong financial health with $385.8 million in cash and investments and zero debt [2] Operational Highlights - CAVA successfully expanded its footprint by opening 16 new restaurants, increasing its total to 398 locations [3] - The company maintained an efficient operational model, achieving a restaurant-level profit margin of 26.3% [3] - Culinary innovation is a focus area, with new menu items introduced, including chicken shawarma and cinnamon sugar pita chips [3] Sales Growth Challenges - Despite strong overall revenue growth, CAVA faced challenges with same-restaurant sales growth, which was reported at 2.1% [3]