From Breakingviews - Cava IPO comes in a little too hot
That implies Cava’s valuation is close to $5 billion, over twice the amount private investors ascribed it in 2021. It also makes Cava the first venture-backed company to go public at a unicorn valuation this year, according to, which tracks billion-dollar exits. That’s an encouraging sign, both for companies hoping to list and their investors eyeing exits.
Even if it inspires copycats, the offering sets an incredibly high bar for the lunch purveyor. Its health-conscious peer, Sweetgreen , saw a similarly substantial pop in its shares on its first day trading in 2021, but now trades at just 20% of its first-day closing price. Cava is a lot like Sweetgreen – neither are profitable, and both have a similar number of stores. But Cava now trades at more than five times its theoretical annualized sales based on the first quarter, much higher than the 1.4 times Sweetgreen commands.
multiple, but Chipotle, unlike Cava, has been profitable for years and operates more than 10 times as many restaurants. Cava has plenty of cash in the lunch bag, but the hummus-fueled hype may prove fleeting.
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