Jim Cramer’s Top 10 Stocks to Track for Potential Growth

7. CAVA Group Inc.  (NYSE:CAVA)

Number of Hedge Fund Investors: 33

Jim Cramer highlights CAVA Group, Inc. (NYSE:CAVA) as an example of a stock with remarkable growth. He initially recommended CAVA Group, Inc. (NYSE:CAVA) when it was priced at $32, and it has since surged to over $125, driven by several strong quarterly reports. Cramer points out that CAVA Group, Inc. (NYSE:CAVA)  is up 192% just since the beginning of the year, showcasing its momentum. Cramer believes these figures, especially the rise in traffic, are exactly what investors want to see in the current market environment.

“Some stocks just don’t know when to quit. Take CAVA Group, Inc.  (NYSE:CAVA), the fast-casual Mediterranean chain that went public a year ago. I started recommending this one at $32, and now it’s trading at $125 and change, thanks to a series of strong quarters. Heck, it’s up 192% just since the beginning of the year. The last time CAVA Group, Inc.  (NYSE:CAVA) reported, toward the end of August, they delivered a tremendous quarter—14.4% same-store sales growth, mostly fueled by a 9.5% uptick in traffic, which is exactly what you want to see in this environment. So, can the stock keep climbing?”

CAVA Group, Inc. (NYSE:CAVA) is an attractive investment option due to its strong financial performance, rapid expansion, and positive outlook in the fast-casual restaurant industry, especially in Mediterranean cuisine. In Q2 2024, CAVA Group, Inc. (NYSE:CAVA) exceeded expectations with earnings per share of $0.17 and revenue of $233.5 million, demonstrating its ability to grow quickly while staying profitable.

CAVA Group, Inc. (NYSE:CAVA)’s aggressive expansion plan—opening 14 new restaurants in Q1 2024 and aiming to add 50-54 locations this year—positions it to capture more of the growing Mediterranean market. Analysts are optimistic, with firms like TD Cowen and Morgan Stanley(NYSE:MS) raising their price targets, reflecting strong confidence in CAVA Group, Inc. (NYSE:CAVA)’s growth. Additionally, CAVA Group, Inc. (NYSE:CAVA)’s improved restaurant-level margins and same-store sales growth highlight its operational efficiency and profitability.

Next Century Growth Small Cap Strategy 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.”