The person leaves the Cava restaurant chain in Pasadena, California on February 6, 2023.

Mario Tama | Getty Images News | Getty Images

As Cava he does his thing public debut On Thursday, other restaurant companies will be watching closely as they decide whether to follow in the footsteps of the Mediterranean restaurant chain.

The last 18 months have marked the slowest initial public offering market since the financial crisis. Few US companies have sought IPOs, fearing a volatile market rocked by the war in Ukraine, inflation, rising interest rates and fears of a recession.

Of the 44 IPOs that have priced stocks this year, only 20 were for U.S.-based companies, according to data from Renaissance capitalwhich tracks IPOs and the performance of newly public shares of companies.

Cava’s IPO could help break that drought, as a handful of restaurants watch the chain fare as they consider whether to jump to the public market themselves. The more than 100% rise in Cava shares at their high on Thursday could bode well for other restaurants.

“Cava’s successful IPO should open the door for other restaurant IPOs,” said Matt Kennedy, senior strategist at Renaissance Capital. “It will show that investors are interested in the space and companies can get some valuations in the public markets.”

at Wednesday evening, Cava priced its IPO at $22 per share, valuing the company at $2.5 billion. The company initially sought to price its common stock offering at $17 to $19 per share, which would give it a $2.12 billion valuation, before raising the range to $19 to $20 per share.

The company will trade on the New York Stock Exchange under the ticker CAVA.

The company’s decision to increase its price range and the stock’s subsequent surge in early trading could be a positive sign for other restaurants considering an IPO.

This bodes well for restaurant companies waiting to exit public. Brazilian steakhouse Fogo de Chão and Korean barbecue chain Gen Restaurant Group have filed confidential regulatory filings, while both Panera bread and Fat Brands’ Twin Peaks shares plans to issue an IPO in the near future.

“Nobody wants to be the first to go public, and that’s why I think we tend to see companies in the same sector going public en masse,” Kennedy said.

But the window to go public may close much faster than it opens, according to Kennedy. Sudden market volatility can spook investors and the private companies hoping to attract them.

While the window remains open for future restaurant IPOs, those companies may not see the same level of investor interest as Cava, which reported same-store sales up 28% in the first quarter. While still unprofitable, the Mediterranean chain is cutting its losses and appears closer to reporting higher net income than rival Sweetgreen, which went public in November 2021.

“[Cava] it rightfully came before most because it is a high-quality name,” said Kevin McCarthy, managing director of Neuberger Berman.

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