Cava (CAVA) is set to report results 8/22 after the close and it will be its 5^th report since coming public, higher three of the prior four with an average max move of more than 11%. CAVA options are pricing in a 10% earnings move and 30-day IV Skew at +1.8 compares to the +1.1 52-week average. CAVA put/call open interest ratio is at the 38^th percentile and average IV30 crush is -21.8%. CAVA largest open interest skews bearish with 6300 short January $80 calls and 2890 short October $90 calls while January $75 puts with 3000 bought in open interest.

CAVA has been a top performer with shares +132% YTD and currently clearing a key $100 level, and on weakness the 21-MA at $86 or retest of value at $89 levels in play as the new high is coming with a bearish weekly RSI divergence.

CAVA operates 309 fast-casual CAVA restaurants in 24 states and Washington, D.C. The Company’s authentic Mediterranean cuisine unites taste and health, with a menu that features chef-created and customizable bowls and pitas. Its dips, spreads, and dressings are centrally produced and sold in grocery stores. CAVA believes there is opportunity for more than 1,000 CAVA restaurants in the United States by 2032 bolstered by trends for ethnic cuisine, a focus on health & wellness and quality/convenience.

CAVA now has a market cap of $11.4B and trades 210X Earnings, 14.5X Sales, and 100X EBITDA, crazy valuation. Revenues are seen rising 20% annually the next few years while EPS growth seen at 27.3% for FY25 and 38% for FY26, one of the strongest growth stories in the industry. AUVs are above $2M and store margins above 20%, comparing favorably to the peer set. 35% digital mix is similar to the main peers CMG and SHAK, with room to grow driven by pickup lanes, delivery, and leaning into the loyalty program over time.

Analysts have an average target of $92 and short interest has held steady near 9% of the float. Stifel raised its target to $110 this week expecting another strong report and mobile location data showing traffic growth from Q1. Wedbush raised its target to $100 seeing multiple drivers of same store sales growth upside and sees upside to margins.

Trade to Consider: With valuation so high, and expectations also high given the run-up into earnings, selling the August 30^th (W) $100/$105 Call Spreads for a $2.20 Credit is an idea, bear call spreads