Chipotle’s Mediterranean Twin Soars 141%—But is $35 Million Per Restaurant Overvalued?

While everyone on earth was losing their freaking minds over Starbucks stealing Chipotle’s CEO Brian Niccoll—and watching Starbucks’ stock jump like my son when he gets another Pokémon card—Cava was over here making moves of its own. This Mediterranean Chipotle doppelganger was quietly crushing it and hitting record highs like it’s no big deal. 

If you haven’t tried Cava yet, it's time to get with the program, according to all the gym rats. Cava is basically the Mediterranean version of Chipotle, but with a healthier twist. We’re talking custom grain bowls, salads, and pita wraps that at least made me feel like I was doing something good for my body. Some folks even call it a “better version” of Chipotle. Just be ready to drop about $20 on a bowl. 

Since going public last June, Cava’s share price has more than doubled, landing just shy of $99 last Friday. Yep, this little known chain is now worth $11 billion. Think about it, that’s 2.6 times what Sweetgreen is worth—and let’s face it, Sweetgreen is practically a salad god at this point (Up 214% YTD). But here’s the wild part—Cava only has 323 stores. That means each store is rocking a $35 million price tag. Overvalued? Maybe just a tad. But hey, that’s the kind of market we’re in right now—where a grain bowl empire can be worth more than some small countries.

(Source: Barron’s)

So, what’s the secret sauce behind Cava’s success? Well, expansion and then more expansion. This Washington DC startup is doing their own version of Jim Harbaugh and taking a play out of the Chipotle playbook—focusing on small town areas where a new Cava will be the talk of the town. If that’s the strategy I expect to see a Cava next to every Dollar General. Ok, not really, but you get the point—world domination, one quinoa bowl at a time.

(Source: CNBC)

They cranked out 72 new locations last year alone, and they’re just getting warmed up. The game plan? Add another 52 this fiscal year and hit 1,000 stores by 2032. That’s a whole lot of steak, pitas, and hummus. Wall Street is practically drooling over this growth story, and it’s not just because everyone’s suddenly obsessed with Mediterranean food. What really gets investors hyped is that Cava is sticking to company-owned stores—no franchising nonsense here, just like their big brother Chipotle. They’re keeping things tight and in control, which is music to Wall Street’s ears. After all, nothing says “we mean business” like keeping all the profits in-house.

But with all this success comes a lot of pressure. Investors have set the bar sky-high, and now everyone’s waiting to see if Cava can keep up the pace when they drop their Q2 earnings this Thursday. It's like waiting for the season finale of Stranger Things—you're excited, but also a little nervous about how it’s going to top the last season.

So while everyone else is busy griping about Chipotle’s portion sizes, Cava is out here making some serious noise in the casual food scene—not so quietly anymore. Sure, some analysts are throwing around the “overvalued” label like yesterday’s news, but guess what? The stock just keeps defying gravity. Who knows how long this can last, but one thing’s for sure: Cava’s got Wall Street hooked, and they’re not ready to fold just yet.

(Source:qsrmagazine)
Stocks.News holds positions in Chipotle, Cava, Sweetgreen and Starbucks.