CAVA Group Downgraded Despite 21.2% Q4 Revenue Growth

CAVA Group Inc. (NYSE: CAVA) reported a 21.2% increase in Q4 revenue, supported by restaurant-level margins of 21.4%. However, the stock recently faced a rating downgrade from Seeking Alpha, driven by concerns over potential margin contraction as the company accelerates its expansion. The company's 2026 guidance projects 74-76 new restaurant openings and same-restaurant sales growth between 3% and 5%. This outlook is notably lower than the 6.5% growth previously forecasted by Guggenheim, which had initiated coverage with a "Buy" rating and a $100 target. Analysts expressed caution regarding adjusted EBITDA growth lagging behind revenue expansion during this high-growth phase. These updates highlight a shift in market sentiment as investors weigh CAVA's aggressive expansion strategy against its long-term profitability margins.