The Investment Thread

Turfie said

The restaurants Cava and Portillo’s just published their annual reports within a day of each other. I’m not terribly good at interpreting financial results… but it’s crazy how different the market values them. Both emerging chains.

Annual revenue:
Cava: $717 million
Portillo’s: $680 million

Net income
Cava: $13.2 million
Portillo’s: $24.8 million

Store numbers
Cava: 309
Portillo’s: 84

Total assets:
Cava: $983 million
Portillo’s: $1.38 billion

Debt:
Cava: $342 million
Portillo’s: $300 million

Market capitalization:
Cava: $6.46 billion
Portillo’s: $1.12 billion

Click to expand...

Cava is now at a market cap of 7.53 billion and Portillo’s at 0.988 billion.

From all of my reading it appears that the market overall has serious doubts on how Portillo’s can expand to 900 restaurant locations and they are only currently at 84 locations.

The CEO has said that beginning in 2026 they will start creating much smaller locations that are for more drive thru orders. If you haven’t seen a Portillo’s in person they are relatively massive restaurants.

But the market doesn’t believe they can aggressively build new restaurants without share offerings.

That has to be the sole reason for the disparity in market valuations between these two restaurants.

On the bullish side, right now Portillo’s is earning more net income with only 84 restaurants vs Cava’s 309 restaurants…..which means IF Portillo’s can slowly build more restaurants without a share offering then there market capitalization should soar much higher than Cava.