Head to Head Contrast: CAVA Group (NYSE:CAVA) vs. Texas Roadhouse (NASDAQ:TXRH)
by Michael Walen · The Markets DailyCAVA Group (NYSE:CAVA – Get Free Report) and Texas Roadhouse (NASDAQ:TXRH – Get Free Report) are both large-cap retail/wholesale companies, but which is the better stock? We will contrast the two businesses based on the strength of their earnings, valuation, risk, institutional ownership, profitability, analyst recommendations and dividends.
Analyst Ratings
This is a summary of current ratings for CAVA Group and Texas Roadhouse, as reported by MarketBeat.com.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score | |
| CAVA Group | 0 | 8 | 8 | 0 | 2.50 |
| Texas Roadhouse | 0 | 12 | 10 | 0 | 2.45 |
CAVA Group presently has a consensus target price of $115.64, indicating a potential downside of 6.56%. Texas Roadhouse has a consensus target price of $172.95, indicating a potential downside of 1.11%. Given Texas Roadhouse’s higher possible upside, analysts clearly believe Texas Roadhouse is more favorable than CAVA Group.
Profitability
This table compares CAVA Group and Texas Roadhouse’s net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets | |
| CAVA Group | 5.04% | 7.37% | 4.25% |
| Texas Roadhouse | 7.47% | 30.94% | 13.40% |
Institutional and Insider Ownership
73.2% of CAVA Group shares are held by institutional investors. Comparatively, 94.8% of Texas Roadhouse shares are held by institutional investors. 0.5% of Texas Roadhouse shares are held by company insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company is poised for long-term growth.
Risk & Volatility
CAVA Group has a beta of 3.34, suggesting that its stock price is 234% more volatile than the S&P 500. Comparatively, Texas Roadhouse has a beta of 0.99, suggesting that its stock price is 1% less volatile than the S&P 500.
Valuation and Earnings
This table compares CAVA Group and Texas Roadhouse”s top-line revenue, earnings per share (EPS) and valuation.
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio | |
| CAVA Group | $728.70 million | 19.42 | $13.28 million | $0.41 | 301.86 |
| Texas Roadhouse | $4.63 billion | 2.52 | $304.88 million | $4.94 | 35.40 |
Texas Roadhouse has higher revenue and earnings than CAVA Group. Texas Roadhouse is trading at a lower price-to-earnings ratio than CAVA Group, indicating that it is currently the more affordable of the two stocks.
Summary
Texas Roadhouse beats CAVA Group on 10 of the 14 factors compared between the two stocks.
About CAVA Group
CAVA Group, Inc. owns and operates a chain of restaurants under the CAVA brand in the United States. The company also offers dips, spreads, and dressings through grocery stores. In addition, the company provides online and mobile ordering platforms. Cava Group, Inc. was founded in 2006 and is headquartered in Washington, the District of Columbia.
About Texas Roadhouse
Texas Roadhouse, Inc., together with its subsidiaries, operates casual dining restaurants in the United States and internationally. It also operates and franchises restaurants under the Texas Roadhouse, Bubba's 33, and Jaggers names in 49 states and ten internationally. Texas Roadhouse, Inc. was founded in 1993 and is based in Louisville, Kentucky.