On Aug. 13, CAVA's (CAVA) stock was hit hard, tumbling nearly 16.6% after the Mediterranean fast-casual chain delivered its fiscal 2025 second-quarter results, which left investors unsettled. The company did beat profit expectations, yet Wall Street’s attention quickly shifted to signs of slowing demand and a trimmed profitability outlook. 

CFO Tricia Tolivar noted that the quarter began with strong same-store sales growth, which had prompted management to reaffirm its prior outlook when reporting first-quarter results. But the pace changed once the chain marked the one-year anniversary of its grilled steak launch. 

The celebratory milestone appeared to coincide with a more gradual growth trajectory at existing locations. The reduced full-year EBITDA forecast only deepened investor caution. As a result, shares slid toward the 52-week low of $65.70, erasing a notable portion of this year’s earlier gains. 

For a brand that had previously enjoyed robust traffic trends, the latest update introduces a new layer of scrutiny. Investors are now left to weigh whether this dip will become a value entry or a caution flag for portfolios that crave consistent sales growth.

About CAVA Stock

CAVA, headquartered in Washington, D.C., runs a growing network of restaurants. Beyond its physical footprint, the company extends its presence into grocery aisles with a line of dips, spreads, and dressings, while digital channels, including online and mobile ordering, remain a vital part of its strategy. 

The market currently values CAVA at roughly $8.1 billion. Performance over the past year has been volatile. Over the last 52 weeks, shares have declined 25.4%, with a steeper 23.5% drop recorded in just the past month as revised guidance unsettled the market.

Valuation metrics, however, show that the market prices CAVA at a premium. It trades at 126.40 times forward-adjusted earnings and 6.93 times sales, both of which are well above the industry averages.

A Closer Look at CAVA’s Q2 Earnings

On Aug. 2, CAVA released its Q2 2025 results, offering a detailed look at current performance and the path ahead. Revenue rose 20.2% year over year to $280.6 million, missing analyst expectations of $286.6 million. Same-store sales increased 2.1%, outperforming much of the industry but falling short of the 6.1% growth forecast by Wall Street. 

The company described quarterly traffic as “roughly flat.” By comparison, the same quarter last year saw a 14.4% increase in same-store sales, driven by nearly double-digit growth in traffic.

Adjusted net income grew 9.4% from the year-ago quarter to $18.4 million, while EPS fell 5.9% from the prior year’s figure to $0.16, still surpassing the $0.13 consensus estimate. On a non-GAAP basis, adjusted EPS was 14.3% higher than a year earlier.

For fiscal 2025, CAVA now projects same-store sales growth of 4% to 6%, down from the previously projected range of 6% to 8%. The company reaffirmed its adjusted EBITDA target of $152 million to $159 million and maintained restaurant-level profit margins between 24.8% and 25.2%. 

Looking ahead, analysts expect Q3 EPS to decline 6.7% year-over-year to $0.14. Yet for the full fiscal year 2025, EPS is forecasted to climb 33.3% to $0.56, with fiscal 2026 bottom line projected to reach $0.67, up 19.6% from the prior year.

What Do Analysts Expect for CAVA Stock?

The earnings stumble has not erased optimism among many analysts, who view the recent pullback as an opportunity to enter at lower levels. During Q2, CAVA added 16 new restaurants, bringing its total to 398 locations, a clear sign that expansion remains central to its strategy. 

Analysts have assigned CAVA an overall rating of “Moderate Buy.” Of the 17 analysts covering the stock, 11 rate it a “Strong Buy” and six recommend a “Hold.”

CAVA’s average price target of $110.50 represents potential upside of 56.8%. Stifel’s Chris O`Cull holds the Street-high target of $125, suggesting a potential climb of 77.4% from current levels. He argued that the earnings shortfall reflects a “temporary setback” rather than a shift in the company’s long-term trajectory.