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. 

WELCOME BONUS - Free Share Bundle When You Invest £50! Get up to £500 cashback for investing with IG.

Invest in 15,000+ shares and ETFs. Open an account now, invest at least £50, and you’ll get a free share bundle worth between £40 and £200. T&Cs apply.

5.0

Open Account Spread bets and CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 68% of retail investor accounts lose money when trading spread bets and CFDs with this provider. You should consider whether you understand how spread bets and CFDs work, and whether you can afford to take the high risk of losing your money.

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.