Cava is insanely valued. It is a restaurant, single digit margins! Priced at 13x sales. This is about double McDonalds who also have 5x the margins at 25%. So you are paying 10x. It is currently priced to utter perfection as you said. Any hiccup will wreck it
Too overvalued for my taste, like Celsius was when you made a video about them. Otherwise, just want to let you know that I love watching your channel and you're doing a wonderful job. I would like to know your thoughts about Inmode (INMD), a wonderful small cap business affected by the high rates but which will soar very soon once FED will cut the rates.
Long time follower here Brain’s - is there a way we can submit a stock for you to review? I’m sure you get a lot of requests but it would be cool if from time to time you review subscriber or member requested stocks
"CAVA is expensive." Tell me something I don't know. If I was worried about paying a premium, I would have sold at $50. I'm own them for the story they will tell tomorrow.
I dont know they are same, I tried CAVA last week and food was as good as the hype. Zoe's was great I repeatedly tried and loved the food. Dont know what changed. I am not going back or investing in the company.
I think that Portillo's (PTLO) is way more attractive at its current valuation. It was IPO's too high in 2021, but now is traded way too low... There is an artificial increase in Class A outstanding shares over the last couple of years which is depressing the share price, but the overall count of Class A+B hasn't changed. This is CAVA 3 years ago or CMG 7 years ago.
Never really been a fan of restaurant stocks….low margins, high capex, not much moat and consumers change their tastes and preferences frequently. You’re very much dependent on A1 marketing and branding catching on at the right time to the right audience. I’d probably invest in Dutch Bros before Cava though
Great analysis and I'm with you, I'm really excited about this company and its growth potential. There still aren't any locations around me so I've not gotten to try it.
I missed out on a lot of good ipo stocks because they said it was expensive but i look at some of them after 5 yrs and they have delivered great numbers so I'm not listening to anyone on cava, they keep expanding and sometimes that's all you need in a restaurant stock, the early expansion phase could make the stock go wild for 5 to 10 yrs before reality sets in
Compared to any stock in the market it’s overvalued. It just passed dominos in market cap with a fraction of the revenues, slightly higher sales growth, and a fraction of the operating margins.
after today's bounce the market is pricing each restaurant at around $41m per store. In what world is that rational? Even if they quadruple the store count and the shares remain flat that's still pricing each store at $10m. I'm sorry but I don't get that valuation. Please tell me what I'm missing and why I'm so stupid.
Holy moly ... I'm thinking that perhaps they are right now in that perfect sweet spot between fast food and in-person dining. Still lot of a pressure to deliver at that price level, but if they keep expanding and keep focus on quality and service delivery (don't let a Panera "mosh pit" scenario develop), they might have quite a long runway of growth.
Cava is insanely valued. It is a restaurant, single digit margins! Priced at 13x sales. This is about double McDonalds who also have 5x the margins at 25%. So you are paying 10x. It is currently priced to utter perfection as you said. Any hiccup will wreck it
@@anujgaike9088 Perhaps- but you are not giving yourself much margin of error. A moatless business with low margins and high valuation seems like a better short than a long imho
Cava is insanely valued. It is a restaurant, single digit margins! Priced at 13x sales. This is about double McDonalds who also have 5x the margins at 25%. So you are paying 10x.
It is currently priced to utter perfection as you said. Any hiccup will wreck it
Too overvalued for my taste, like Celsius was when you made a video about them. Otherwise, just want to let you know that I love watching your channel and you're doing a wonderful job. I would like to know your thoughts about Inmode (INMD), a wonderful small cap business affected by the high rates but which will soar very soon once FED will cut the rates.
you like trash like INMD but denounce a diamond like CAVA....doesnt make any sense
They have a really good product, good to see the management team expanding the operation as well !
How could you compare it during the initial stages of CWG?
Long time follower here Brain’s - is there a way we can submit a stock for you to review? I’m sure you get a lot of requests but it would be cool if from time to time you review subscriber or member requested stocks
I ahve a few shares.. I guess I will buy on any market pullback this fall
"CAVA is expensive." Tell me something I don't know. If I was worried about paying a premium, I would have sold at $50. I'm own them for the story they will tell tomorrow.
nobody cared about Zoe's kitchen, but now it's called Cava and investors are going crazy.
The power of branding
I dont know they are same, I tried CAVA last week and food was as good as the hype. Zoe's was great I repeatedly tried and loved the food. Dont know what changed. I am not going back or investing in the company.
I think that Portillo's (PTLO) is way more attractive at its current valuation. It was IPO's too high in 2021, but now is traded way too low... There is an artificial increase in Class A outstanding shares over the last couple of years which is depressing the share price, but the overall count of Class A+B hasn't changed. This is CAVA 3 years ago or CMG 7 years ago.
Never really been a fan of restaurant stocks….low margins, high capex, not much moat and consumers change their tastes and preferences frequently. You’re very much dependent on A1 marketing and branding catching on at the right time to the right audience. I’d probably invest in Dutch Bros before Cava though
Agree they kinda follow the hype. Vegan, keto etc
Tell that to folks that got huge returns from Chipotle stock. Restaurant stocks are a good play because of traffic and cost per meal. Do the math.
Brian,
Can’t wait to get the membership for your new service. When?
Great analysis and I'm with you, I'm really excited about this company and its growth potential. There still aren't any locations around me so I've not gotten to try it.
I am in San Francisco bay area and I have not seen any restaurant here. Large diversified population and it will be big hit here too.
I like the business plan and that type of food, but that is a crazy valuation.
I missed out on a lot of good ipo stocks because they said it was expensive but i look at some of them after 5 yrs and they have delivered great numbers so I'm not listening to anyone on cava, they keep expanding and sometimes that's all you need in a restaurant stock, the early expansion phase could make the stock go wild for 5 to 10 yrs before reality sets in
If I compare it to Texas roadhouse it's just so highly valued...
Compared to any stock in the market it’s overvalued. It just passed dominos in market cap with a fraction of the revenues, slightly higher sales growth, and a fraction of the operating margins.
Fast forward to now its at 140 a share back in august it was hovering at lows of 80 to 77.
Its a buy rating for most. Might hit 155 by January.
This type of restaurants if theres a recession, even if a mild one, the margin will get annihilated.
after today's bounce the market is pricing each restaurant at around $41m per store. In what world is that rational? Even if they quadruple the store count and the shares remain flat that's still pricing each store at $10m. I'm sorry but I don't get that valuation. Please tell me what I'm missing and why I'm so stupid.
the most complicated and also most rewarding investment skill is to predict future earnings growth for growing companies.
Holy moly ... I'm thinking that perhaps they are right now in that perfect sweet spot between fast food and in-person dining. Still lot of a pressure to deliver at that price level, but if they keep expanding and keep focus on quality and service delivery (don't let a Panera "mosh pit" scenario develop), they might have quite a long runway of growth.
I knew it was going to be cava
150 PE?
Wow. I'd run
I loved going to Zoe’s Kitchen
302 PE wtf
$KRUS looking like a moat
Sure only 32% short interest. Everyone else loves it.
Lol dude is FOMOing in
I’d rather buy CMG
Cava is insanely valued. It is a restaurant, single digit margins! Priced at 13x sales. This is about double McDonalds who also have 5x the margins at 25%. So you are paying 10x.
It is currently priced to utter perfection as you said. Any hiccup will wreck it
They are paying 10x more because they have lot of growth in future.
@@anujgaike9088 Perhaps- but you are not giving yourself much margin of error. A moatless business with low margins and high valuation seems like a better short than a long imho