I come in here to write up on a nice little stock I like to call CAVA. I just demoralized one of their Mediterranean bowls the other day, and when I was inside, some girl said, "Why can't they open one up in Parksville?" I almost said, don't worry shawty, eventually they will.
CAVA has just reached its 52-week low and touched 25 on the RSI yesterday. Its 52-week spread is honestly incredible, 172 high, 58 low, and I feel for those who bought in the triple digits. But I'm not done believing. And I'm CERTAINLY not fading them because of a 50x multiple. Can you guess Chipotle's multiple over the last decade? It is 77x. Over the last seven years, Chipotle grew EPS roughly 40% CAGR (excluding COVID). Chipper was really always trading at a premium.
Now, I'm not sitting here comparing them to Chipotle, just looking at an industry peer. But I want to put into perspective just how small CAVA is, and just how enticing this 2032 1,000-restaurant goal is. They currently only have 400 locations across the U.S. In 2007, one year after Chipper's IPO, they had \~700. Five years later, they doubled their store count, and in those five years, more than doubled their operating margin. In fact, Chipper's operating margin in 2007 was 7.5%, similar to CAVA's 7.38% last quarter. Rapid expansion in the QSR industry pushes margins, and like Ackman said, you can't go wrong owning a growing food chain.
I'm still bullish on CAVA, and yes, I own the shit out of it. I'd love to hear your guys' thoughts. Just wanted to provide a little historical context with Chipper, as they are widely considered the next Chipper in Mediterranean.