CAVA Stock Down Big Pre-Market on Earnings: Analyst Calls Out Buy Opportunity

CAVA Group's stock (NYSE: CAVA) is in freefall this morning, after a disappointing earnings report has pushed the price 24% lower in extended hours trading. The sell-off was triggered by lower-than-expected same-store sales growth, overshadowing otherwise positive aspects of the company's Q2 2025 performance.

While CAVA reported earnings per share (EPS) of $0.16, exceeding analyst estimates of $0.13, and revenue of $331.83 million, surpassing forecasts of $327.98 million, the market focused intently on the company's revised annual same-store sales growth forecast.

CAVA lowered its projection to 4%-6%, down from the previous 6%-8%, citing a slowdown in foot traffic during June and early July attributed to broader economic uncertainties. 

The market's reaction was swift and unforgiving, wiping out a significant portion of CAVA's market capitalization, and leaving the stock set to open at new 52 week lows, around $64.08.

However, amidst the prevailing bearish sentiment, one prominent voice remains defiantly bullish: Stifel analyst Chris O'Cull. O'Cull views the sharp pullback in CAVA shares as a compelling buying opportunity, arguing that the market's reaction is an overreaction to a temporary setback.

In a note to investors, O'Cull acknowledged his “disappointment” with CAVA's Q2 same-restaurant sales growth of “just” 2.1% but emphasized that this single data point does not justify a $2 billion hit to the company's market value. He highlighted that CAVA beat EBITDA estimates and that new stores are ramping up quickly, reaffirming his belief in the company's long-term growth potential. Stifel maintains a Buy rating and a $125 price target on CAVA shares, implying significant upside from current levels.

O'Cull's bullish stance is rooted in his conviction that the recent weakness is a “temporary setback, not a change in the fundamental outlook.” He points to CAVA's strong brand presence, effective expansion strategy, and ability to outperform in a competitive fast-casual market.

While Stifel's bullish stance provides a glimmer of hope for investors, the market's recent reaction serves as a reminder of the risks involved in investing in high-growth companies.