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Yahoo
6 days ago
- Business
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3 Monster Growth Stocks That Could Soar 31% to 116%, According to Wall Street
At least one retailer is reporting strong demand for its products despite pressure in the industry. One restaurant chain continues to report impressive growth that could lead to tremendous gains for investors. This e-commerce company is delivering solid growth and expanding into new businesses. 10 stocks we like better than RH › Finding stocks with enormous growth potential that are trading at reasonable valuations is one way to access potentially monster gains in the stock market. Promising consumer brands like RH (NYSE: RH), Cava Group (NYSE: CAVA), and e-commerce specialist Coupang (NYSE: CPNG) are trading at prices that Wall Street analysts see as attractive buying opportunities for investors. Are these stocks truly good buys now? Here's what three contributors think about these companies' prospects. (RH): RH is an upscale furniture retailer. That's not necessarily a great business to be in when the real estate industry is tanking and consumers are cutting back on discretionary spending. RH (formerly Restoration Hardware) operates a varied omnichannel business that includes a limited number of freestanding galleries in upscale neighborhoods, a strong digital presence, and offers several luxury experiences involving restaurants, yachts, jets, and a guesthouse. It's looking to become a top luxury brand rather than a simple furniture seller. Despite the pressure in the economy right now, it's launching new design concepts and opening new galleries. It released 42 new collections over the past few months, and CEO Gary Friedman said that the company is developing a new concept that will expand its market opportunity, coming up for release toward the end of the year. RH's results for the fiscal 2025 fourth quarter (ended Feb. 1) were mixed, with a 10% year-over-year increase in revenue and a 9% increase in operating income. Demand, which measures the dollar value of orders placed, increased 17%, and for the RH brand, it was up 21%. That indicates a strong brand with potential, and it's an impressive feat considering the pressured economy. However, RH came in below Wall Street's expectations for earnings per share by $0.33, which sent its stock plummeting. Friedman originally said the company wouldn't be affected by tariffs on Chinese goods, but it expected uncertainty as the situation remains dynamic. Earnings were released on "Liberation Day," when President Donald Trump announced his tariffs, and management followed that up with an explanation about how it's well diversified with suppliers and doesn't think it's at any disadvantage compared with similar companies. But these are all short-term factors. RH has a strong brand, resilient clientele, and large market opportunity. The average Wall Street analyst price target for the stock over the next 12 to 18 months is 20% higher than it is today, but Barclays analyst Seth Sigman sees it reaching $436, or 116% more than its current price. If conditions improve enough for RH to keep reporting progress and the market climbs on economic optimism, there's a chance that could happen. But even if it doesn't reach that price in the near term, it has a robust long-term outlook. John Ballard (Cava Group): If an investor had put $10,000 in Chipotle stock 15 years ago, those shares would be worth $180,000 today. Those investors caught an up-and-coming restaurant brand before it went mainstream. Cava may provide new investors with a similar opportunity. Cava is carving itself a profitable niche focusing on a Mediterranean-based menu, and it is growing revenue at rates that could send the stock soaring over the next decade. It just reported another strong quarter, with revenue up 28% year over year. Importantly, its favorable restaurant-level economics are already producing a stellar profit margin of 13.7%. This is already above Chipotle's margin and explains why the stock soared last year. Investors are giving Cava a lot of credit for strong traffic trends and a profitable formula for future expansion. That strategy involves using technology to personalize customer communications, increase automation to make its restaurants easier to run, and deliver quality food while maintaining consistency across every location. Wall Street is bullish and rightly so. The consensus rating is currently an overweight buy recommendation with an average price target of $116, implying 36% upside from the current $85 share price. Some analysts have even higher targets on the shares. However, I wouldn't buy the stock expecting it to hit the consensus target in the near term. The stock appears fully valued at the moment, trading at nearly 10 times sales. The high valuation at the previous peak explains why the stock fell to start the year. For perspective, Chipotle shares trade at 6 times sales, although it's not growing nearly as fast as Cava. But I recently took advantage of the dip to start a small position, which I plan to gradually add to as Cava continues to grow. Investors who dollar-cost average into the stock should earn a great return over time. Jeremy Bowman (Coupang): E-commerce stocks like Amazon, MercadoLibre, and Sea Limited have all delivered strong returns, but there's another global e-commerce stock that investors should take a closer look at. Coupang, a U.S-headquartered company becoming the e-commerce leader in South Korea, is delivering impressive growth as it builds out a network of competitive advantages. In the first quarter, revenue ticked up 11% year over year, or 21% on a currency-neutral basis, to $7.9 billion, and margins improved with the gross margin rising 217 basis points to 29.3%. Operating income rose from $114 million to $154 million. Besides e-commerce, Coupang is finding success with new categories it calls Developing Offerings like International, Eats, Play, Fintech, and Farfetch, which rose 67%, or 78% on a currency-neutral basis. It also announced a $1 billion stock repurchase authorization, showing that the company believes its shares are undervalued. The company is starting to get some attention from Wall Street, and one analyst sees the stock having 31% upside. Barclays analyst Jiong Shao raised his price target on Coupang from $35 to $36 following the earnings report and reiterated his overweight rating on the stock. Looking ahead, the stock appears to have significant upside. If margins continue to improve and the tailwinds build in its developing offerings, Coupang should have a bright future. Before you buy stock in RH, consider this: The Motley Fool Stock Advisor analyst team just identified what they believe are the for investors to buy now… and RH wasn't one of them. The 10 stocks that made the cut could produce monster returns in the coming years. Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you'd have $640,662!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you'd have $814,127!* Now, it's worth noting Stock Advisor's total average return is 963% — a market-crushing outperformance compared to 168% for the S&P 500. Don't miss out on the latest top 10 list, available when you join . See the 10 stocks » *Stock Advisor returns as of May 19, 2025 John Mackey, former CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool's board of directors. Jennifer Saibil has positions in MercadoLibre. Jeremy Bowman has positions in Amazon, Cava Group, MercadoLibre, and RH. John Ballard has positions in Cava Group, Coupang, and MercadoLibre. The Motley Fool has positions in and recommends Amazon, MercadoLibre, and Sea Limited. The Motley Fool recommends Barclays Plc, Cava Group, Coupang, and RH. The Motley Fool has a disclosure policy. 3 Monster Growth Stocks That Could Soar 31% to 116%, According to Wall Street was originally published by The Motley Fool
Yahoo
22-05-2025
- Business
- Yahoo
CAVA Group, Inc. (CAVA) Is a Trending Stock: Facts to Know Before Betting on It
Cava Group (CAVA) is one of the stocks most watched by visitors lately. So, it might be a good idea to review some of the factors that might affect the near-term performance of the stock. Shares of this Mediterranean restaurant chain have returned -3.2% over the past month versus the Zacks S&P 500 composite's +13.4% change. The Zacks Retail - Restaurants industry, to which Cava belongs, has gained 5% over this period. Now the key question is: Where could the stock be headed in the near term? Although media reports or rumors about a significant change in a company's business prospects usually cause its stock to trend and lead to an immediate price change, there are always certain fundamental factors that ultimately drive the buy-and-hold decision. Rather than focusing on anything else, we at Zacks prioritize evaluating the change in a company's earnings projection. This is because we believe the fair value for its stock is determined by the present value of its future stream of earnings. Our analysis is essentially based on how sell-side analysts covering the stock are revising their earnings estimates to take the latest business trends into account. When earnings estimates for a company go up, the fair value for its stock goes up as well. And when a stock's fair value is higher than its current market price, investors tend to buy the stock, resulting in its price moving upward. Because of this, empirical studies indicate a strong correlation between trends in earnings estimate revisions and short-term stock price movements. Cava is expected to post earnings of $0.14 per share for the current quarter, representing a year-over-year change of -17.7%. Over the last 30 days, the Zacks Consensus Estimate has changed -17.8%. For the current fiscal year, the consensus earnings estimate of $0.58 points to a change of +38.1% from the prior year. Over the last 30 days, this estimate has changed +5.8%. For the next fiscal year, the consensus earnings estimate of $0.69 indicates a change of +17.7% from what Cava is expected to report a year ago. Over the past month, the estimate has changed -2.5%. With an impressive externally audited track record, our proprietary stock rating tool -- the Zacks Rank -- is a more conclusive indicator of a stock's near-term price performance, as it effectively harnesses the power of earnings estimate revisions. The size of the recent change in the consensus estimate, along with three other factors related to earnings estimates, has resulted in a Zacks Rank #2 (Buy) for Cava. The chart below shows the evolution of the company's forward 12-month consensus EPS estimate: While earnings growth is arguably the most superior indicator of a company's financial health, nothing happens as such if a business isn't able to grow its revenues. After all, it's nearly impossible for a company to increase its earnings for an extended period without increasing its revenues. So, it's important to know a company's potential revenue growth. In the case of Cava, the consensus sales estimate of $289.95 million for the current quarter points to a year-over-year change of +24.2%. The $1.2 billion and $1.45 billion estimates for the current and next fiscal years indicate changes of +24.3% and +21.4%, respectively. Cava reported revenues of $331.83 million in the last reported quarter, representing a year-over-year change of +28.1%. EPS of $0.22 for the same period compares with $0.12 a year ago. Compared to the Zacks Consensus Estimate of $330.64 million, the reported revenues represent a surprise of +0.36%. The EPS surprise was +57.14%. Over the last four quarters, Cava surpassed consensus EPS estimates three times. The company topped consensus revenue estimates each time over this period. Without considering a stock's valuation, no investment decision can be efficient. In predicting a stock's future price performance, it's crucial to determine whether its current price correctly reflects the intrinsic value of the underlying business and the company's growth prospects. Comparing the current value of a company's valuation multiples, such as its price-to-earnings (P/E), price-to-sales (P/S), and price-to-cash flow (P/CF), to its own historical values helps ascertain whether its stock is fairly valued, overvalued, or undervalued, whereas comparing the company relative to its peers on these parameters gives a good sense of how reasonable its stock price is. As part of the Zacks Style Scores system, the Zacks Value Style Score (which evaluates both traditional and unconventional valuation metrics) organizes stocks into five groups ranging from A to F (A is better than B; B is better than C; and so on), making it helpful in identifying whether a stock is overvalued, rightly valued, or temporarily undervalued. Cava is graded F on this front, indicating that it is trading at a premium to its peers. Click here to see the values of some of the valuation metrics that have driven this grade. The facts discussed here and much other information on might help determine whether or not it's worthwhile paying attention to the market buzz about Cava. However, its Zacks Rank #2 does suggest that it may outperform the broader market in the near term. Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report CAVA Group, Inc. (CAVA) : Free Stock Analysis Report This article originally published on Zacks Investment Research ( Zacks Investment Research
Yahoo
20-05-2025
- Business
- Yahoo
Why Are Cava Shares Falling Despite Strong Results, and What Does It Mean for Investors?
Cava once again saw tremendous same-store sales growth in its latest quarter. The company has a huge expansion opportunity still in front of it. It has all the ingredients to be the next Chipotle-type growth story. 10 stocks we like better than Cava Group › Despite being one of the fastest-growing restaurant concepts around, Cava Group's (NYSE: CAVA) stock has failed to gain any traction this year. This was evident once again after its stock slipped despite another strong showing from the fast-casual Mediterranean-themed restaurant operator when it reported its fiscal first-quarter results. The stock is now down around 14% in 2025, as of this writing. Let's dig into the company's fiscal Q1 results to see if investors should buy the dip in the stock. Cava's string of double-digit same-store sales growth continued in its fiscal Q1, which ended April 20. Its same-restaurant sales climbed 10.8%, with a 7.5% increase in guest traffic and a 3.3% rise in price and mix. That was just ahead of the 10.3% increase that analysts had projected, as compiled by StreetAccount. It also continued its strong streak of recent same-store sales results over the past four quarters. Metric Q2 2024 Q3 2024 Q4 2024 Q1 2025 Same-store sales growth 14.4% 18.1% 21.2% 10.8% Traffic 9.5% 12.9% 15.6% 7.5% Price and mix 4.9% 5.2% 5.6% 3.3% Data source: Cava Group earnings press releases. The introduction of grilled steak last summer was the catalyst for the company's strong same-store sales growth, and it said this past quarter that it was continuing to see customers add higher-priced items to its orders, such as pita chips and house-made juices. It called out strength across geographies and income brackets as well, noting that the company was benefiting from customers trading up from fast food as well as trading down from casual-dining restaurants. Its summer menu introductions this year will include chef-curated bowls and Hot Harissa Pita Chips, and it's testing new menu items such as chicken shawarma in select markets. It's also looking to help drive growth by adding a tiered structure to its loyalty program that will tailor benefits and look to increase customer engagement. Cava's overall revenue for the quarter climbed 28% year over year to $328.5 million. It opened 15 new locations in the quarter, bringing its total to 382 restaurants, an 18% year-over-year increase. It is now operating in 26 states after entering Indiana with plans to enter the new markets of Detroit and Pittsburgh later this year. Overall, it plans to open between 64 and 68 new locations in 2025. Its restaurant-level margins (RLMs) stayed steady at 25.1% in the quarter versus 25.2% a year ago. RLMs measure the profitability of restaurants before corporate costs and are an important metric in the industry. Cava's RLMs were just below the 26.2% that Chipotle Mexican Grill produced in Q1, showing how strong the company's operating performance is compared to one of the leaders in the industry. On the profitability front, Cava's adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) rose 35% year over year to $44.9 million. The company produced $38.6 million in operating cash flow in the quarter and free cash flow of $2.7 million. This demonstrates that Cava is able to expand its locations while living within its means, not taking any undue risks. Looking ahead, the company raised its 2025 adjusted EBITDA outlook, taking it from between $150 million and $157 million to a new range of $152 million to $159 million. Meanwhile, it maintained its forecast for same-store sales to increase by 6% to 8% with RLMs ranging from 24.8% to 25.2%. It implemented an approximate 1.7% price increase in early January and has no plans for additional increases. It said its exposure to tariffs is limited as the majority of its ingredients are domestically sourced or covered under existing contracts. Trading at a forward price-to-earnings (P/E) ratio of nearly 174 and a price-to-sales ratio of 9.4 based on 2025 analyst estimates, Cava stock is not cheap. And right now, valuation is the biggest risk to the stock, especially if consumer spending begins to slow. However, with fewer than 400 locations and its same-store sales booming, the company has a huge expansion opportunity in front of it. It's looking to reach at least 1,000 restaurants by 2032, which is nearly triple the number of locations it has today. Overall, Cava has all the ingredients of a highly successful emerging restaurant stock, with strong same-store sales, robust RLMs, attractive average unit volumes, and a long runway for expansion. As such, long-term investors can look to take a position in this strong story. Before you buy stock in Cava Group, consider this: The Motley Fool Stock Advisor analyst team just identified what they believe are the for investors to buy now… and Cava Group wasn't one of them. The 10 stocks that made the cut could produce monster returns in the coming years. Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you'd have $642,582!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you'd have $829,879!* Now, it's worth noting Stock Advisor's total average return is 975% — a market-crushing outperformance compared to 172% for the S&P 500. Don't miss out on the latest top 10 list, available when you join . See the 10 stocks » *Stock Advisor returns as of May 19, 2025 Geoffrey Seiler has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Chipotle Mexican Grill. The Motley Fool recommends Cava Group and recommends the following options: short June 2025 $55 calls on Chipotle Mexican Grill. The Motley Fool has a disclosure policy. Why Are Cava Shares Falling Despite Strong Results, and What Does It Mean for Investors? was originally published by The Motley Fool Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
Yahoo
18-05-2025
- Business
- Yahoo
Cava is opening up to 68 new restaurants in 2025: See a list of locations coming soon to 5 states
Cava Group Inc. (NYSE: CAVA), the parent company of Cava, a Mediterranean fast-casual restaurant brand, announced it is opening up to 68 new U.S. locations in fiscal 2025, after reporting better-than-expected first quarter earnings results. Trump abruptly stopped paying farmers to feed in-need Californians—so they fought back 'I'll never get out of this hole': Older Americans brace as DOE begins Social Security garnishments In Seattle, a group of friends wanted to live together—so they built their own apartment building Cava, also known as Cava Grill, currently operates 382 locations across the United States, in 26 states and Washington, D.C. (as of the close of Q1). 2024 was Cava's first full calendar year as a public company. While Cava told Fast Company it does not release a full list of future locations, a look at the website shows restaurants in the following cities are 'coming soon': Phoenix, AZ Huntington Beach, CA Plantation, FL Bel Air, MD Burlington, NC Charlotte, NC Cava told Fast Company that of the targeted 64 to 68 new restaurants it plans to open this year, it has already opened 15 net new locations (in Q1) representing an 18.3% increase in total restaurants year over year. Those are in the following states: Florida (Ocala, Palm Harbor, Hialeah) New Jersey (East Brunswick, Union, Marlton) Massachusetts (Chelmsford, Chestnut Hill) Louisiana (Lafayette, New Orleans) Texas Virginia Indiana North Carolina New York The company previously said it wants to reach 1,000 locations by 2032. At the same time many fast-food chains and casual-dining restaurants are struggling, Cava's growth stands out. Chief financial officer Tricia Tolivar told CNBC that over the last few quarters, Cava has found it's hitting a sweet spot for customers who are trading up from fast food to purchase Cava's healthy bowls and pitas, while trading down, seeing it as cheaper than other casual-dining options. Cava cofounder and CEO Brett Schulman said the chain has purposely priced food items for the current economic times, while focusing on healthy food and hospitality. 'At a time when guests are being more selective about where they dine, the appeal of our Mediterranean cuisine continues to resonate with the modern consumer,' Schulman told Fast Company. 'We've also stayed focused on delivering our unique value proposition, investing in our guests, and underpricing inflation. We offer a warm, welcoming environment that fosters a genuine human connection. It's why we continue to drive traffic and sales growth, crossing $1 billion in revenue in the past 12 months.' Speaking of revenue, here's a look at Cava's first-quarter earnings numbers: Revenue grew 28.2% to $328.5 million, compared with $256.3 million in the prior year quarter Same restaurant sales growth of 10.8%, including guest traffic growth of 7.5% Cava Group net income of $25.7 million, compared with $14.0 million of net income and $11.9 million of adjusted net income in the prior year quarter Despite a strong quarter, Cava's same-store sales forecast of a 6% to 8% increase remained consistent with last quarter, and could be one reason shares were down about 3% in afternoon trading on Friday. As Fast Company previously reported, while Cava's revenue grew 33% in 2024 along with a 9% jump in traffic, with same-restaurant sales up 13%, last quarter the chain forecast slower growth in the later half of fiscal 2025. This post originally appeared at to get the Fast Company newsletter: Sign in to access your portfolio
Yahoo
16-05-2025
- Business
- Yahoo
Top Stock Movers Now: Charter Communications, Vistra, Cava Group, and More
U.S. equities edged higher at midday as investor optimism about trade deals and inflation outweighed falling consumer sentiment. Applied Materials was the worst-performing stock in the S&P 500 when the semiconductor equipment maker missed revenue forecasts as sales in China slumped. Shares of Cava Group fell after the Mediterranean restaurant chain gave a disappointing full-year outlook even as profit and sales beat estimates.U.S. equities edged higher at midday as investor optimism about trade deals and inflation outweighed falling consumer sentiment. The Dow Jones Industrial Average, S&P 500, and Nasdaq all rose less than 0.2%. Applied Materials (AMAT) was the worst-performing stock in the S&P 500 when the semiconductor equipment maker missed revenue forecasts as sales in China slumped. Shares of Cava Group (CAVA) fell after the Mediterranean restaurant chain gave a disappointing full-year outlook even as profit and sales beat estimates. U.S.-listed shares of Novo Nordisk (NVO) declined when the pharmaceutical firm ousted CEO Lars Fruergaard Jørgensen as the company was losing ground to rivals in the weight-loss drug market. Charter Communications (CHTR) shares rose after the cable provider bought rival Cox Communications for $34.5 billion, including debt. Shares of Vistra (VST) gained when the power provider purchased seven natural gas generation facilities from Lotus Infrastructure Partners for $1.9 billion. Virgin Galactic Holdings (SPCE) skyrocketed after the space tourism firm started by Richard Branson had better-than-anticipated results, reduced expenses, announced new flight plans, and raised prices. Oil futures advanced. Gold prices dropped. The yield on the 10-year Treasury note was little changed. The U.S. dollar was up on the euro, pound, and yen. Most major cryptocurrencies traded higher. Read the original article on Investopedia Sign in to access your portfolio
