Cava (CAVA.US) stock price doubles, Wall Street now has the only "sell" rating: Weak customer traffic, valuation raises concerns.

It is noted that the stock price of the Mediterranean-style casual dining chain Cava Group (CAVA.US) has more than doubled in the past five months. However, according to the only analyst on Wall Street who currently has a bearish outlook on the stock, this rebound has gone too far. Northcoast Research analyst Jim Sanderson began covering this restaurant operator this week and gave it a "sell" rating with a target price of $63, the lowest in the US. Just the day before, Cava's stock closed at $97.39, reaching its highest level since May 2025, rebounding over 120% from its low point in late November last year. Sanderson's target price implies a potential downside of over 32% from Thursday's closing price. Sanderson said in an interview, "Based on the macroeconomic conditions I see, the risk profile is worrisome," adding that the rise in stock price has made holding costs expensive. "For me, the red flag is that the traffic at some mature stores seems very mediocre. In many cases, compared to peers, the traffic trends at these stores have been negative for several months." This round of Cava's stock price surge was driven by the optimistic annual outlook released by the company at the end of February, contrasting sharply with the nearly 50% decline in 2025. Previously, investors had been bearish on Cava and its industry competitors (such as Chipotle Mexican Grill Inc. and Sweetgreen Inc.) due to concerns about inflation and slowing economic growth. This rebound has led to Cava's stock price having a very high premium relative to the broader market and its competitors, becoming a major focus of controversy on Wall Street. Cava's forward price-to-earnings ratio is as high as 159 times, compared to Chipotle's approximately 28 times, and the S&P 500 index at nearly 21 times. DA Davidson analyst Matt Curtis began covering Cava in March and gave it a "neutral" rating with a target price of $80. He believes that Cava's "hot" valuation limits the stock's future upside potential. Compiled data shows that in addition to Sanderson's "sell" rating, the stock currently has 17 "buy" ratings and 13 "hold" ratings.