CAVA Group reports Q1 2026 results on Tuesday evening in a notably different positioning environment than just six weeks ago — short sellers have been covering aggressively, but options traders are now the most defensively positioned they have been all year.
The short-side retreat is the most striking data point heading in. SI hit nearly 15.5% of free float in early April; it has since fallen to 11.8%, a decline of roughly a quarter in six weeks. The pace accelerated last week, with SI dropping more than 8% in five sessions alone. Borrow conditions remain loose — cost to borrow runs at just 0.48% annualised, and the borrow market is well below the tightest levels seen this year. That unwinding pressure is absent as a near-term headwind. Yet the options market tells a sharply different story. The put/call ratio jumped to 0.68 this week, now running more than 2.4 standard deviations above its 20-day average of 0.60 — a reading that is close to the most defensive options positioning of the past year (52-week high: 0.91). Shorts are leaving, but derivatives traders are hedging harder.
The analyst community has spent April and May lifting targets almost uniformly, creating a floor of bullish expectation that the print must now meet. JP Morgan raised its target to $90, Morgan Stanley nudged to $85, Goldman Sachs moved to $86, and RBC carried theirs to $100 — all within the past four weeks. Most recently, UBS and Telsey raised targets in the days following the last reported print, with the consensus mean now at $90.28 against a current price of $76.87. That gap — roughly 17% upside to the Street's mean — reflects bulls' confidence in CAVA's Mediterranean fast-casual growth story: strong same-store sales momentum, a 26-state footprint still far short of its 1,000-location ambition, and health-and-wellness tailwinds that keep the concept differentiated. Bears focus on the other side of that expansion: centralized production risk at scale, fast-casual consumer sensitivity to any macro softening, and a P/E multiple that, even after pulling back sharply over the past month, still registers above 127x trailing earnings.
The stock is down 13% over the past month to $76.87, though it bounced 1% on Friday, hinting that some of the pre-earnings discount may already be priced in. The earnings history adds texture: a year ago, CAVA surged 25% after the print and held most of those gains over the following week. The most recent prior period saw a 9.6% one-day drop — a reminder that the stock is capable of large moves in either direction. Peer context is mixed: SG spiked 17% on the week on its own results, while SHAK fell nearly 14% — a divergent backdrop that underscores how stock-specific the fast-casual reaction function has become. Insider activity has been exclusively sales over the past 90 days, with net proceeds of roughly $4.8 million, though most transactions appear routine and carry low significance scores.
Tuesday's print is therefore a test of whether CAVA's unit economics and same-store sales growth can justify the renewed analyst optimism — and whether the options market's sudden demand for protection reflects genuine caution or simply the usual pre-earnings hedging ritual.
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