Just caught something interesting about Cava stock that's worth looking at. The Mediterranean restaurant chain just posted some pretty upbeat guidance for 2026, and the market's been loving it - shares jumped hard after earnings. Up 45% year to date, which is a solid run, but here's the thing: I think it might be running ahead of itself.

Last year was rough for Cava. Stock got cut nearly in half because comparable sales growth basically stalled out. The main culprit was tough year-over-year comparisons from their grilled steak option launch in 2024. But now that they're past those comparisons, management is forecasting 3% to 5% comp growth for 2026. That's a meaningful jump from where they finished 2025 - just a 0.5% increase in Q4.

The operational numbers are actually pretty solid. Q4 revenue climbed 21% year over year to $272.8 million. They opened 24 new spots in the quarter alone, bringing their total to 439 locations. That's nearly a 20% increase compared to a year ago. For 2026, they're planning to open 74 to 76 new restaurants, which keeps them on track toward their goal of 1,000 locations by 2032.

What's interesting is their restaurant-level margins - came in at 21.4% in Q4, down slightly from 22.4% a year prior, but they're guiding for 23.7% to 24.2% in 2026. They're running this similar to Chipotle's model - minimal ingredient complexity, lots of combinations. That's a solid operational approach. Free cash flow for the year hit $26.1 million, and operating cash flow was $184.8 million.

Here's where I see the issue though. They've got a market cap of $9.8 billion with 439 locations. That values each restaurant at roughly $22.3 million per location. But each location is only doing about $3 million in annual sales. That's an extremely aggressive valuation. Yeah, they have a huge expansion story ahead of them - still entering new markets, infilling existing ones - and the growth runway is real. But at current valuations, a lot of that expansion opportunity is already priced in.

The upbeat guidance is legit, and the business model is sound. But after this run-up, the stock looks overextended. The expansion opportunity is there, no question, but the valuation seems to have gotten way out in front of the fundamentals. Worth watching, but I'd be cautious chasing it at these levels.