Jim Cramer is Talking About These 12 Stocks

9. CAVA Group, Inc. (NYSE:CAVA)

Number of Hedge Fund Holders: 33

According to Cramer, CAVA Group, Inc. (NYSE:CAVA) is “one of the great new concepts that we have seen in this market” and the market seems to echo this sentiment as the stock has gained approximately 300% over the past year.

The company runs a chain of Mediterranean fast-casual restaurants across the United States under the CAVA brand. The restaurant concept focuses on healthful, flavorful food options while also offering a variety of dips, spreads, and dressings available in grocery stores.

With a market capitalization exceeding $13 billion, the company is finding its strong footing as a player in the fast-casual dining space with its blend of convenience and bold culinary experiences.

Since going public in June 2023, CAVA (NYSE:CAVA) has made ambitious plans for growth, setting a target of reaching 1,000 locations by 2032. As of the end of the first quarter following its IPO, the company operated 279 restaurants, and by the second quarter of 2024, that number had increased to 341. The rapid expansion is proof of management’s ambitious strategy of scaling the company’s presence in the market.

In the second quarter, it reported a 9.5% increase in customer traffic. The company opened 18 net new restaurants during this period and its average unit volume reached an impressive $2.7 million, which points to the effectiveness of its business model.

Furthermore, the second-quarter same-store sales surged by over 14%, a sign that existing locations are gaining popularity and drawing in more customers. The company seems to be on a good track and Cramer has recommended to hold on to the stock and buy more if it comes down.

Next Century Growth Investors, LLC stated the following regarding CAVA Group, Inc. (NYSE:CAVA) in its first quarter 2024 investor letter:

“CAVA Group, Inc. (NYSE:CAVA) is a fast casual restaurant chain serving authentic Mediterranean cuisine, featuring customizable bowls and pitas. CAVA currently owns and operates >300 stores, and the company targets a 15% plus new store growth rate. The intermediate goal is to have 1,000 stores by 2032 with plenty of opportunity to grow beyond that level. The company already delivers solid restaurant level margins >20% and they believe 3-5% same store sales growth is achievable over time. As the business matures, they should be able to leverage G&A expense which should lead to strong earnings growth over many years.”