Is Cava a Buy as Same-Store Sales Start to Sizzle?

Shares of Cava Group (NYSE: CAVA) rose after the Mediterranean-cuisine restaurant operator saw robust same-store sales growth and raised its full-year guidance. The stock is up nearly 40% year to date, but still down close to 10% over the past year.

Let's take a closer look at the company's latest results and prospects to see if now is the time to buy shares.

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Strong growth

After a tough 2025, as its same-store sales growth slowed due to lapping the introduction of its hugely popular grilled steak option in 2024, Cava is back with a vengeance in 2026. Its comparable restaurant sales surged 9.7% in the first quarter, led by a 6.8% increase in traffic. Meanwhile, the company had a 1.4% price increase in January, saying it wasn't concerned with rivals' discounting. The same-store sales growth was a huge jump from the 0.5% increase it saw in Q4.

Overall revenue for the quarter surged 32% year over year to $434.4 million. It opened 20 new locations in the quarter, bringing its total to 459, a 20% increase versus a year ago.

The company continues to expand, with a focus on Midwestern markets. It slightly raised its outlook for new restaurant openings to 75-77, up from a prior estimate of 74-76 this fiscal year. Its goal is to have at least 1,000 restaurants by 2032.

Its restaurant-level margins came in at 25.1% in the quarter, unchanged from a year ago. Restaurant-level margins measure how profitable a chain's individual restaurants are before corporate costs. It expects a 2026 restaurant-level margin of between 23.7% and 24.3%.

On the profitability front, Cava's adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) surged by 38% year over year to $61.7 million. The company also generated $64.1 million in operating cash flow for the quarter and $15.5 million in free cash flow.

Is it time to buy the stock?

There are a lot of things to like about Cava. It has strong restaurant-level margins and robust average unit volumes of $3 million. The company has shown in the past that its menu item innovations, such as grilled steak, can help ignite same-store sales growth, and it is just now introducing salmon, which could be its next big driver. Meanwhile, with 459 locations, it has a huge expansion runway in front of it.

That said, with a $9.5 billion market cap and 459 stores with $3 million in sales each, investors are paying around 7 times each store's average unit volume. No one would come close to paying $20.7 million for a single restaurant doing $750,000 in profits (and this is before any corporate overhead costs).

If the company can grow to 1,500 locations in the next decade and continue to increase average unit volumes to around $4 million, you can still make money on the stock long term. However, you're paying a huge multiple today and needing everything to go right. As such, I'd wouldn't chase the stock at this valuation.

Geoffrey Seiler has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Cava Group. The Motley Fool has a disclosure policy.