Is CAVA's Q3 2024 EPS trend sustainable?

**CAVA's Q3 2024 EPS trend is not currently forming a sustainable pattern.** Here's an analysis based on the latest data: 1. **Recent Performance**: CAVA's diluted EPS for Q3 2024 was $0.17, which is a decrease from the previous quarter's EPS of $0.21. This decline indicates a short-term trend that is not currently forming a sustainable pattern. |code|Ticker|Name|Date|Diluted EPS YoY|market_code| |---|---|---|---|---|---| |CAVA|CAVA.N|CAVA Group|2024 Q1|109.23076923076923|169| |CAVA|CAVA.N|CAVA Group|2024 Q2|-19.047619047619037|169| |CAVA|CAVA.N|CAVA Group|2024 Q3|150|169| 2. **Market Analysts' Perspectives**: Despite the short-term decline, analysts have a positive long-term outlook on CAVA. For instance, BofA Securities analyst Sara Senatore initiated coverage with a Buy rating, indicating confidence in CAVA's potential to outgrow expectations with strong unit economics and market headroom. Similarly, Citi has increased CAVA's stock target, highlighting the company's solid fundamentals and growth drivers. 3. **Growth Drivers**: CAVA's growth drivers, such as menu innovations, advertising, and new side options, are expected to boost customer numbers and spending frequency. The company's efficient assembly-line model also provides the capacity to meet rising demand. These factors suggest that CAVA has the potential for sustainable growth, but the immediate EPS trend is not currently forming a sustainable pattern. 4. **Strategic Initiatives**: CAVA's strategic initiatives, such as the relaunch of its loyalty program and plans to expand its Mediterranean cuisine footprint, are positive signs for long-term sustainability. However, these initiatives may not immediately reverse the current EPS trend. In conclusion, while CAVA's long-term fundamentals and growth drivers are positive, the Q3 2024 EPS trend is not currently forming a sustainable pattern due to the recent decline in EPS. However, the company's strategic initiatives and analysts' positive outlook suggest that the current trend may be temporary and could lead to a sustainable EPS trend in the future.