CAVA Faces Valuation Risk After 61% Rally as Margins and Returns Lag

CAVA Group shares have surged 61.3% over the past six months to $79.45, but the stock’s valuation and profitability metrics present risks for investors, according to a May 13, 2026, StockStory analysis. The report cited CAVA’s average operating margin of 4.6% over the past two years, calling it weak for the restaurant sector. It also noted that full-year earnings per share fell 27.2% over the past two years, or 12.8% annually, raising concerns about whether sales growth is translating into profitable expansion. StockStory also pointed to CAVA’s negative 12% five-year average return on invested capital, indicating losses on capital deployed for growth. After the rally, CAVA trades at 159.4 times forward earnings, suggesting much of the company’s positive outlook may already be reflected in the share price.