Is Cava Group, Inc. overvalued or undervalued?

As of 15 May 2025, the valuation grade for Cava Group, Inc. has moved from expensive to very expensive, indicating a significant shift in its perceived value. The company is currently overvalued, with a P/E ratio of 65, a Price to Book Value of 12.70, and an EV to EBITDA of 67.18. These ratios are considerably higher than those of its peers, such as Darden Restaurants, Inc. with a P/E of 24.86 and Yum China Holdings, Inc. with a P/E of 17.01, highlighting the premium at which Cava is trading.
Additionally, the company's PEG ratio stands at an impressively low 0.20, suggesting potential growth, yet this is overshadowed by its high valuation metrics. The recent stock performance shows a year-to-date return of -33.29%, which starkly contrasts with the S&P 500's gain of 2.44% during the same period, further reinforcing the notion that Cava Group, Inc. is currently overvalued in the market.