CAVA Group, Inc. (CAVA): Among the High Growth Restaurant Stocks for 2025

We recently compiled a list of the 10 High Growth Restaurant Stocks For 2025. In this article, we are going to take a look at where CAVA Group, Inc. (NYSE:CAVA) stands against the other high growth restaurant stocks.

Morgan Stanley recently published a report on the restaurant industry, suggesting that the tough environment that the industry is currently facing may ease out in 2025, though only modestly. Restaurants will have to continue working on providing value meals to consumers who continue to struggle to balance their income and expenses.

A balanced job market could help keep labor costs steady. However, a political campaign against immigration could be a potential headwind for the industry. A growing emphasis on robotics to improve efficiency and customer service could also play a key role in the industry’s development this year, though it is too early to determine the financial implications of these moves.

We decided to shortlist a few stocks that we believe could benefit from an improving industry environment in 2025. To come up with the list of 10 restaurant stocks with a high growth rate, we only considered stocks that have grown by more than 15% in the last 5 years or since IPO and have a market cap of at least $1 billion.

A close-up image of a colorful salad platter with toppings and dressings.

CAVA Group, Inc. (NYSE:CAVA)

CAVA Group Inc. runs a restaurant chain that provides Mediterranean-inspired food and salad dressing, dips, and spreads in grocery stores. Moreover, it offers mobile ordering and online platforms.

It is a competitor of companies like Dominos, Dutch Bros, Yum China Holdings, and TXRH. All these companies are valued in a narrow range in terms of market cap. However, only Dutch Bros has a higher sales growth, more than double that of CAVA. CAVA is also valued at a premium compared to its competitors, but that can be pinned down to impressive growth and cash flows.

For instance, while the entire sector struggled to improve its cash flows, CAVA grew its operating cash flow by 110% YoY. This is the type of company that Wall Street loves, hence the rich valuation which shouldn’t scare investors. The stock is already up 8% YTD while most of its industry peers struggle to appreciate in price.

Overall CAVA ranks 10th on our list of the high growth restaurant stocks for 2025. While we acknowledge the potential of CAVA as an investment, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns, and doing so within a shorter timeframe. If you are looking for an AI stock that is as promising as CAVA but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.

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Disclosure: None. This article was originally published at Insider Monkey.