CAVA Stock Looking for Direction After Earnings Miss

Written by Chris Markoch

CAVA Group Inc. (NYSE: CAVA) stock is down a fraction in midday trading the day after the company delivered a disappointing, but not surprising, third-quarter earnings report.

For the quarter ended Oct. 5, the company generated adjusted earnings per share (EPS) of 12 cents on revenue of $289.79 million. The company missed estimates by 13 cents per share on revenue of $291.95 million.

However, what may be boosting investor sentiment is that both the top and bottom-line numbers compared favorably to the company’s results from the same quarter in 2024. On a year-over-year (YOY) basis, CAVA’s revenue was 19% higher, and EPS was 18% higher.

The Fast Casual Fade Continues

CAVA stock investors were hoping that the restaurant chain would be the anti-Chipotle in this earnings cycle. That is, show that the weakness in the Chipotle Mexican Grill (NYSE: CMG) numbers was confined to Chipotle.

That wasn’t the case as CAVA’s results show a broader weakness among restaurant stocks. The chain’s core consumer remains under stress that is eating away at disposable income. Even McDonald’s Corp. (NYSE: MCD)acknowledges that it is dealing with a bifurcated consumer economy.

One could argue that this is a transitory phenomenon, and that may be true. For its part, CAVA lowered its guidance slightly but still plans to open new stores. It also still delivered a healthy 24.6% restaurant-level profit margin in the quarter.

However, investors are in a “sell-first and ask questions later” kind of mood. So, while the results from CAVA Group were far from awful, they were bad enough to send the stock lower.

Understanding CAVA’s Valuation

The investor reaction to CAVA’s results comes down to one word that is affecting many stocks: valuation.

CAVA stock trades at 43x earnings and 103x forward earnings. That may not be a fair measure of the stock’s value because the company is still expanding its brick-and-mortar footprint.

A more accurate measure may be the company’s enterprise value-to-sales (EV/Sales) ratio. This is a standard metric that compares a company’s enterprise value (i.e., its potential takeover price) to its annual sales. Currently, CAVA checks in with an EV/sales ratio of 5.24, which is a discount to its historical average.

Investors may say that doesn’t say much for a company that’s only been trading publicly for a little over two years.

However, when compared to a company like Dutch Bros Coffee (NYSE: BROS), which has only been publicly traded for about four years, the results are favorable. BROS stock has an EV/sales ratio of 6.49%.

After a Big Drop, CAVA Stock May Offer Solid Value

One reason CAVA stock may have found a floor is that it has already declined by approximately 58% in 2025 and is down 5% over the last week. Most of that loss occurred before the earnings announcement. So, this may be a case of investors expecting the results to be worse than they were.

The CAVA Group analysts tracked by MarketBeat have given the stock a consensus price target of $84.45, representing a 61% increase from its current price.

However, they have been lowering their price targets in the days leading up to the earnings announcement.

But it’s worth noting that the lowest price target at that time was $61, which is still a 13% gain from the current price.

Short interest is around 13% and has increased by about 2% in the last month. That lines up with institutional activity.

In the last quarter, selling slightly outpaced buying, suggesting institutions are attempting to move the CAVA stock price to a more favorable entry point.

They may have succeeded. The relative strength index is around 29, which puts the stock in oversold territory. It’s also trading near the lower Bollinger band, which leaves room for the stock to move higher.

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3 Small AI Stocks Ready to Explode (All Under $20)

Written by Bridget Bennett

If you’ve ever wished you’d caught the internet boom early—or owned shares of a company like NVIDIA (NASDAQ: NVDA) before it became a $5 trillion tech behemoth—this one’s for you.

Artificial intelligence is clearly one of the dominant stories of our time. But some of the most interesting opportunities aren’t in the headliners…they’re in the “picks and shovels” companies quietly powering the movement forward.

In a recent conversation with analyst and trader Nate Tucci from the New Money Crew, three under-the-radar stocks stood out as potential breakout winners. Each one is still trading under $20, and each one is closely tied to the future infrastructure needed to support AI’s explosive growth.

And if you’re looking for a strategy to complement those moonshot plays, this overnight income approach Nate uses can be a smart way to bring in more consistent returns along the way.

New Era Energy: Following the IREN Playbook

New Era Energy (NASDAQ: NUAI) isn’t hiding its intentions. It’s following the exact playbook of IREN (NASDAQ: IREN)—a former crypto miner turned AI energy infrastructure provider that has surged from about $15 to more than $70.

“They are not even pretending that they are not just copycatting that exact playbook,” Nate says. And that’s not necessarily a bad thing.

New Era was initially focused on helium mining in the crypto world, but it pivoted after realizing its energy infrastructure could serve the AI sector far more effectively. With catalysts like its Texas facility, pending deals, and energy generation announcements, the company is lining up the kind of headlines that could drive viral interest.

Yes, it’s speculative. But the market cap is still just a fraction of IREN’s, meaning there’s plenty of room for upside if a few things go right.

EOS Energy: Zinc Batteries With Breakout Potential

EOS Energy (NASDAQ: EOSE) is another “picks and shovels” play, but this one’s rooted in breakthrough battery tech.

EOS is focused on zinc-powered, long-duration batteries—a potential alternative to lithium for energy storage that’s safe, sustainable, and built for the kind of grid demands AI could place on our power systems.

The stock has already had a run—up over 125% in the past few months—but Nate believes this one still has a path higher. “They probably have the most deal structures already in place,” he says, noting the company’s growing attention from analysts and industry insiders.

Recent price target upgrades (including $20 and $22) show that Wall Street is starting to pay attention.

Strive: Bitcoin Leverage Without the Coins

Strive (NASDAQ: ASST) may be better known in crypto circles than AI ones—but its evolution as a treasury-backed Bitcoin play has interesting crossover potential.

Inspired by Strategy (NASDAQ: MSTR), Strive originally mined Bitcoin but now aims to serve as a treasury-like vehicle, holding Bitcoin on its balance sheet and amplifying its exposure to crypto’s future.

With shares recently trading around $1.20, Nate sees massive upside if Bitcoin returns to its highs. “If Bitcoin makes the run from $100K to $150K, the math on that is a 50% gain,” he says. “I would guess ASST goes up 1,000% over the same move.”

It’s not for the faint of heart. But for those willing to risk small amounts in exchange for large potential returns, it could be a compelling piece of a more diversified long-term strategy.

Risk and Reward: Positioning Early in Disruptive Trends

Whether you’re investing in battery tech, energy infrastructure, or crypto-backed AI exposure, these are the types of opportunities that may fly under the radar—until they don’t.

As Nate reminds investors, “There isn’t going to be just one winner. We’ll probably see hundreds.” And with the right balance of risk and reward, a few smart picks now could go a long way later.

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After 16% Fall, Analysts Eye a Big Recovery in Meta Platforms

Written by Leo Miller

Meta Platforms (NASDAQ: META) just saw its biggest post-earnings fall in three years.

Shares dropped by over 11% on Oct. 30 as investors reacted to the company’s Q3 2025 earnings and commentary. This was the biggest down move the Magnificent Seven stock has seen after an earnings report since Q3 2022.

However, based on Wall Street’s reaction, you might not know it.

Analyst sentiment held surprisingly firm as the stock dropped, suggesting a potential disconnect between market panic and long-term valuation. Below, we break down the shift in analyst forecasts and examine what’s fueling the fear—and the optimism.

Wall Street Analysts Show Confidence in META After Q3 Plunge

Relatively speaking, Wall Street analysts held to their forecasts on Meta despite its dramatic sell-off. MarketBeat’s price target data shows 20 analysts who updated their forecasts. Among these analysts, the average price target moved down by only 5%.

That’s less than half the actual drop Meta shares saw the day after the report.

This divergence widened even further in the days that followed.

Since reporting, Meta shares are down more than 16% as of the Nov. 4 close.

Clearly, the market reacted much more negatively to the results than these analysts did. This is a signal that there could now be an opportunity in Meta shares.

As of Nov. 5, the MarketBeat consensus price target on Meta stands at nearly $827, implying strong upside in shares to the tune of 29%. Notably, analysts who issued or updated their price targets after the company’s Q3 earnings have an even more optimistic view. Among them, the average price target comes in at nearly $857. This number suggests that Meta shares could rise by 37%.

Even the very lowest updated target of $770, which comes from Wells Fargo & Company, implies almost 23% upside. Rosenblatt Securities was one of the few analysts who raised their Meta price target. Their $1,117 forecast on Meta is the most bullish tracked by MarketBeat and indicates shares could gain by 78%.

In no uncertain terms, analysts are demonstrating their confidence that Meta shares will recover in a big way.

Meta’s AI Spending Spree Could Weigh Mightily on FCF in 2026

Meta’s spending forecasts were instrumental to the stock’s post-earnings fall. The company projects capital expenditures (CAPEX) to rise to $71 billion in 2025, up from $39 billion in 2024. Moreover, it warned that CAPEX growth would be “notably larger” in 2026. If that guidance holds, 2026 CapEx could easily exceed $103 billion.

In 2026, projections indicate that Meta’s cash from operations will be $127 billion. Given this, even if Meta’s CAPEX came in only at $103 billion, its free cash flow (FCF) would be around $24 billion. That would be more than 40% below the $42.5 billion in FCF it generated over the last 12 months.

Overall, Meta is saying that it is going to spend massively on AI, which could put significant pressure on FCF next year. For this reason, it is understandable that investors feel alarmed. The company appears to be willing to sacrifice near-term FCF generation to position itself for long-term AI-driven growth.

Despite Fears, Meta Has Shown AI Investing Prowess in the Past

It’s worth revisiting Meta’s situation in Q3 2022. After that earnings report, shares dropped over 24% to a shockingly low $97. At that time, the company’s advertising business was under pressure, and Mark Zuckerberg was dead set on the metaverse.

However, the firm was also investing in AI to improve ad targeting and delivery. Analysts were downgrading the stock and referencing AI investments as justification for this.

Meta shares then went on an incredible run. As of the Nov. 4 close, Meta trades at approximately $627, gaining more than 380% from that $97 figure. Early investments have helped its AI-powered ad tools achieve an over $60 billion annual revenue run rate, a key contributor to the stock’s performance. This isn’t to suggest that Meta will achieve anywhere close to those types of gains over the next three years. However, it does show that Meta has proven doubters wrong in the past when it comes to investing in AI.

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