CAVA (CAVA) ZACKS·2025-04-10 17:01Core Viewpoint - Chipotle Mexican Grill, Inc. (CMG) and CAVA Group, Inc. (CAVA) are key players in the fast-casual restaurant sector, both emphasizing health-conscious and customizable meal options. The current market volatility raises questions about which stock presents better value and growth potential. Factors to Consider for CMG - Chipotle operates in multiple countries, including the U.S., Canada, and several European nations, focusing on high-quality ingredients and food integrity standards [1] - The company is enhancing its digital program, with digital sales accounting for 35.1% of total food and beverage revenues in 2024, supported by partnerships with delivery services like Uber Eats and Grubhub [2] - Chipotle opened 304 restaurants in 2024, with plans to open 315-345 locations in 2025, over 80% of which will feature a Chipotlane [3] - Approximately 50% of Chipotle's avocados are sourced from Mexico, which poses risks due to the ongoing tariff war [4] Factors to Consider for CAVA - CAVA is leveraging technology for operational efficiency and customer experience, including AI-powered video technology and a new kitchen display system to enhance order accuracy [5][6] - The company opened 58 new restaurants in 2024 and plans to expand further into cities like Detroit and Indianapolis in 2025, with an expected 62-66 openings this year [7] - Menu innovation is crucial for CAVA's competitive edge, with plans to introduce new items that align with consumer preferences [8] Zacks Consensus Estimates - For Chipotle, the 2025 sales and EPS estimates indicate year-over-year growth of 11.1% and 14.3%, respectively, although earnings estimates have seen a downward revision of 1.6% recently [9] - CAVA's 2025 sales and EPS estimates suggest increases of 24.1% and 33.3%, with earnings estimates revised upward by 3.7% in the past month [10] Price Performance & Valuation - CAVA's stock has increased by 38.4% over the past year, outperforming its industry and the S&P 500, while CMG shares have declined by 14.9% [11] - CAVA is trading at a forward price-to-sales ratio of 8.4X, below its median of 10.94X, while CMG's ratio is 5.3X, also below its median of 6.35X [14] Conclusion - Both companies are strong in the fast-casual market, with Chipotle's established presence and digital strategy contrasting with CAVA's rapid growth and technological advancements. While Chipotle is stable, CAVA's growth trajectory and improved earnings outlook make it a more attractive investment at this time [16][17]