Cava Stock Is Down 30% Since Last Earnings, But Retail Bulls Firmly Believe It’s Oversold

Cava Group Inc. stock piqued the interest of retail investors on Stocktwits early Tuesday, after its 6% slide in the previous session following the departure of its chief operating officer.

The ticker was among the top five trending stocks on the platform, with retail sentiment shifting to 'extremely bullish' from 'neutral' the previous day. Several users discussed buy calls.

"It was all about stop loss raid and force liquidation. Huge manipulation down. Good upside going forward for those who got in at this oversold cheap level. Loaded," said one user.

"$CAVA Definitely not telling the wife about this one," joked another bullish user.

The shift in sentiment seems warranted. Cava shares have declined by more than 30% since the company's quarterly report on Aug. 12. At the time, the company slashed its annual same-store sales growth target for the first time since it listed on the New York Stock Exchange two years ago.

Some analysts believe that Gen Z consumers are visiting fast-casual chains less frequently, which is pressuring sales at Cava, Chipotle, and Sweetgreen. Last week, Benchmark analyst Todd Brooks cited the resumption of federal student loan payments in May and a rise in the unemployment rate for recent college graduates to 5.8% in March, from 4.1% a year earlier, as key factors squeezing younger diners’ budgets.

Cava is a Mediterranean restaurant chain, known for its customizable bowls, pitas and salads, which has gained popularity among health-conscious diners.

On Friday, the company disclosed that COO Jennifer Somers had left and that senior vice president of operations, Jonathan Braatvedt, had taken on his duties temporarily.

Cava stock is down 48% year-to-date, pushing the company’s market cap to $6.8 billion.

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