Cava (NYSE:CAVA), which owns fast-casual Mediterranean restaurants, priced its initial public offering (IPO) today at $22 per share, and CAVA stock will start trading this morning.
Here are seven more things to know about the company and the CAVA IPO:
- Cava raised $318 million through the CAVA IPO.
- The stock has a market capitalization of $2.45 billion.
- The firm has 263 restaurants and wants to expand to over 1,000 by 2033.
- In the 16 weeks that ended on April 16, it lost $2.1 million, well below the $20 million that it lost in the same period in 2022.
- Cava is the first restaurant chain to launch an IPO since late 2021.
- The company reportedly has “restaurant operating margins” similar to those of Chipotle (NYSE:CMG).
- Cava was launched by four men in 2010, three of whom were friends “since they were six” years old and attended Sunday School together in a Greek church.
More Information About Cava
The company contends that it’s the only nationwide Mediterranean restaurant chain, and its sales jumped at a compound annual growth rate of 52.2% from Cava’s fiscal 2016 to its fiscal 2022. It burned $120 million of cash in FY22, including capital spending,
CAVA stock is “a high-quality name,” Kevin McCarthy, managing director at Neuberger Berman, told CNBC.
Disagreeing with the latter thesis was Seeking Alpha columnist David Trainer, who advised investors to stay far away from Cava, citing its lack of profitability, along with his belief that it will have few growth catalysts going forward.
The columnist also noted that Cava warned that its “capital expenditure requirements to open [each] new restaurant will be significantly higher” from now on than they have been “in the past few years.”
Cava acquired Zoe’s Kitchen, another Mediterranean fast-casual chain, five years ago.
On the date of publication, Larry Ramer did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
