With the S&P 500 sitting at 20%+ gains for the year despite rumblings of potential macro malaise and a contentious U.S. election, investors have to take substantial care to ensure our portfolios are protected in the case of downside. Stock selection remains of utmost
CAVA Group: Unsupportable Valuation
Summary
- Shares of CAVA have surged to all-time highs on the back of recent strong Q2 results, which featured an acceleration in same-store sales.
- The company is set to report Q3 results on November 12. Watch out for slower consumer spending impacting sales growth trends.
- Despite a recently raised outlook, CAVA looks very expensive at >100x adjusted EBITDA.
- I remain at a sell rating for CAVA, as the stock sustains tremendous valuation and fundamental risk.
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