SHAK - Cava trades with a higher market cap than Wendy's Shake Shack and Papa John's after strong IPO debut

2023-06-15 14:56:16 ET

CAVA Group ( NYSE: CAVA ) traded at more than double its IPO pricing level in late afternoon trading on Thursday as investors gobbled up the first restaurant IPO since Sweetgreen ( SG ) in November of 2021.

The Mediterranean fast-casual restaurant has a market cap of close to $5B based on the 111M shares that are outstanding to give it a higher valuation than Wendy's ( WEN ), Shake Shack ( SHAK ), Papa John's International ( PZZA ), Cracker Barrel Old Country Store ( CBRL ), and Jack in the Box ( JACK ). At its high point, Cava swapped hands at $47.89 per shares after the IPO was priced at $22 per share on Wednesday.

Cava ( CAVA ) plans to use proceeds from the offering of 14.44M shares to fund future new restaurant openings, with any remaining proceeds for general corporate purposes, which may include the repayment of its delayed draw terms loans used to finance construction and capital expenditures for its new production facility in Virginia.

In the S-1 filing, Cava Group ( CAVA ) noted that it over the past 12 years it established itself as the only national player at scale in the fast-growing Mediterranean category, with more than twice the number of restaurants compared to the next largest competitor in the category. Total revenue rose to $564M in FY22 from $45.4M in FY16 for a 52.2% compound annual growth rate. Last year, the chain saw same-restaurant sales growth of 14.2% to easily top the restaurant industy average. The company also noted it has a strong Millennial and a growing Gen Z contingent of customers.

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