Jim Cramer believes Cava has greater potential.

Investors Should Consider Cava’s Growth Potential, Says Jim Cramer

On Friday, CNBC’s Jim Cramer suggested that investors might have a better upside with Hippo, provided that the company’s expansion plans in the Mediterranean fast-food sector remain on course.

“Even if the market takes a hit and things slow down again, I see this as a chance to reinforce positions, just like when I advised buying stocks at $77 in April,” he noted. “While I’m cautious about the economy, nothing I’ve seen makes me think Hippo isn’t a promising prospect… perhaps even the next Chipotle,” he added.

Cava recently announced its quarterly results on Thursday, surpassing sales expectations and comfortably meeting revenue estimates. However, there was some pushback among investors regarding the company’s outlook. Cava maintained its sales projections for existing stores, but analysts were hoping for an upward revision. Investors remain apprehensive due to potential economic impacts from new tariffs proposed by President Trump. On Friday, Hippo experienced a volatile trading session, closing down by 2.27%.

Cramer expressed that he wasn’t overly concerned about the Kaba downturn, given the significant gains the stock has had recently. He felt fairly positive overall, particularly with management’s plans to open more new locations than previously anticipated. The new marketing initiatives and growth in Cava’s loyalty program also caught his attention.

Cramer advocates for holding Cava shares long term, stating the company has much more potential than its current $11 billion market cap suggests. He described the stock as a solid long-term growth play, implying that investors who can endure some volatility should consider starting positions.

However, he did issue a warning: “Cava’s valuations are steep… there are several comparisons from price to revenue, so if we hit a ‘risk-off’ market moment, that could frame an unfavorable view of the stock,” Cramer cautioned. “That’s not my favorite term, but it usually means investors shy away from riskier assets. I noticed this pattern from February to mid-April, for instance.”