Senior executives at Mediterranean restaurant chain Cava Group (CAVA) have been selling stock as the company’s share price has risen 210% since its initial public offering in June 2023.
Filings with the U.S. Securities and Exchange Commission (SEC) show that Cava Chief Executive Officer (CEO) Brett Schulman sold 201,504 shares worth nearly $25 million U.S.
Cava co-founder Ted Xenohristos sold 98,490 shares worth $12 million U.S. in recent days, and Chief Financial Officer (CFO) Patricia Tolivar sold 5,000 shares for proceeds of $628,175 U.S.
The executive stock sales come after Cava shares have skyrocketed since the company held its IPO a little over a year ago.
Shares of Cava are up 190% so far this year while the benchmark S&P 500 index has gained 18%.
Since going public, Cava has reported a string of profitable financial results that have trounced Wall Street’s forecasts.
Most recently, Cava stock rose 20% in a single trading day after the restaurant chain reported strong results for its latest fiscal quarter and raised its forward guidance.
Cava now expects full-year earnings of $109 million U.S. to $114 million U.S. That’s up from previous expectations of $100 million U.S. to $105 million U.S.
While executives routinely sell stock they own in the companies they run, share sales can be seen as a negative sign by investors.
Some analysts have also raised concerns about the valuation of Cava stock following its big run over the past year, noting that the shares currently trade at a pricey valuation of 250 times forward earnings and 12 times forward sales.
News that Cava executives have been selling stock sent the company’s share price down 6% on Aug. 27 to finish trading at $118.10 U.S. per share.
