CAVA Group's 9.75% Plunge: A 52-Week Low Amidst Expansion Hype and Analyst Divergence

Summary
• CAVA Group (CAVA) slumps to $54.57, a 9.75% intraday drop, hitting its 52-week low of $53.5588
• Q2 2025 results show 20.3% revenue growth and 26.3% restaurant-level profit margin
• Analysts split between bearish technical signals and bullish expansion narratives
• Options chain reveals high implied volatility (115-130%) and leveraged put/call activity

CAVA Group’s stock has plunged to a 52-week low amid conflicting signals from fundamentals and technicals. Despite robust Q2 revenue growth and margin expansion, bearish momentum indicators and analyst downgrades have triggered a sharp selloff. The stock’s 9.75% decline underscores a critical inflection point for investors weighing expansion optimism against near-term volatility.

Bearish Momentum and Analyst Divergence Fuel the Slide
CAVA’s 9.75% intraday drop to $54.57 reflects a confluence of bearish technical signals and analyst skepticism. The stock’s RSI of 35.78 (oversold territory) and MACD of -0.69 (bearish divergence) suggest short-term exhaustion. Meanwhile, recent analyst downgrades and declining earnings expectations have amplified selling pressure. Despite Q2 results showing 20.3% revenue growth and 26.3% profit margins, investors are pricing in execution risks around the company’s aggressive 400-restaurant expansion and margin pressures from input costs.

Restaurants Sector Mixed as MCD Gains 0.44%
The Restaurants sector remains fragmented, with McDonald’s (MCD) rising 0.44% despite CAVA’s selloff. While CAVA’s bearish technicals and margin pressures contrast with MCD’s stability, the sector’s broader narrative of cautious optimism around Q3 earnings and digital adoption persists. CAVA’s 52-week low highlights its divergence from sector leaders, as investors prioritize defensive plays over high-growth peers.

Leveraged Puts and Calls for Volatility Play
• 200-day MA: $85.83 (far above current price)
• RSI: 35.79 (oversold)
• MACD: -0.69 (bearish)
• Bollinger Bands: $60.91–$65.69 (CAVA at lower band)
• 30D MA: $63.11 (support near $63.50)

CAVA’s technicals suggest a potential bounce from oversold levels but remain vulnerable to further declines. Key support at $53.55 (52W low) and resistance at $63.50 (30D MA) define the near-term range. The options chain offers high-leverage plays for both bearish and bullish scenarios:

• CAVA20251107P55 (Put):
- Strike: $55, Expiry: 2025-11-07
- IV: 118.13% (high volatility)
- Delta: -0.48 (moderate sensitivity)
- Theta: -0.0857 (slow time decay)
- Gamma: 0.0394 (responsive to price swings)
- Turnover: $125,362 (liquid)
- Leverage Ratio: 12.76%
- Payoff (5% downside): $0.715 per share
- This put offers asymmetric upside if CAVA breaks below $53.55, with high liquidity and volatility amplifying potential returns.

• CAVA20251107C55 (Call):
- Strike: $55, Expiry: 2025-11-07
- IV: 123.25% (high volatility)
- Delta: 0.52 (moderate sensitivity)
- Theta: -0.3442 (rapid time decay)
- Gamma: 0.0378 (responsive to price swings)
- Turnover: $68,921 (liquid)
- Leverage Ratio: 13.62%
- Payoff (5% upside): $0.715 per share
- This call is ideal for a short-term rebound trade, capitalizing on oversold RSI and potential short-covering above $55.

Action Insight: Aggressive bulls may consider CAVA20251107C55 into a bounce above $55, while bears should monitor CAVA20251107P55 for a breakdown below $53.55.

Backtest CAVA Group Stock Performance
I attempted to run the event-backtest, but the engine reported that the event-date list contained no valid occurrences. A quick sanity-check of the daily high/low series confirms that, from the start of 2022 through 30 Oct 2025, CAVA never experienced a single trading day where (low − high) / high ≤ −10 %Using the daily bar as a proxy for intraday range, the −10 % plunge condition is therefore unmet, so the back-test has no data to evaluate and the engine returned an empty result set (hence the “empty sequence” error you saw).How would you like to proceed?1. Relax the trigger threshold (e.g. −7 % or −5 %) to see whether any events appear.2. Use a different definition (e.g. close-to-close drop ≥ 10 % or a two-day cumulative drawdown).3. Analyse another stock or index.Let me know which adjustment (if any) you prefer and I can rerun the analysis accordingly.

CAVA at Inflection Point: Watch $53.55 Support and MCD’s Lead
CAVA’s 9.75% plunge to a 52-week low has created a critical juncture for investors. While Q2 fundamentals remain strong, bearish technicals and analyst skepticism suggest further volatility. The stock’s survival hinges on holding $53.55 (52W low) and a potential rebound from oversold RSI levels. Sector leader McDonald’s (MCD) gaining 0.44% offers a barometer for risk appetite. Act now: Short-term traders should prioritize CAVA20251107P55 for downside protection or CAVA20251107C55 for a rebound trade, while long-term investors should await a clearer breakout above $63.50 (30D MA).