Sweetgreen’s Strategic Growth and Expansion: A Buy Rating Backed by Strong Customer Acquisition and Profitability

William Blair analyst Sharon Zackfia has reiterated their bullish stance on SG stock, giving a Buy rating on May 15.

Sharon Zackfia’s rating is based on several compelling factors. The management’s confidence in Sweetgreen’s ability to improve trends through seasonal offerings, which have historically increased customer frequency, is a key consideration. The company has successfully expanded its customer base and usage occasions with new menu items, demonstrating strong new customer acquisition.
Furthermore, Sweetgreen has shown its capability to achieve unit-level margins of 20% while opening new locations at higher volumes and profitability. The company’s growth potential is significant, with expectations to expand to over 1,200 locations and generate annual revenue exceeding $3.5 billion. Despite recent volatility in comparable sales, the long-term growth prospects and strategic initiatives support the Buy rating.

Zackfia covers the Consumer Cyclical sector, focusing on stocks such as Sweetgreen, OneSpaWorld Holdings, and El Pollo LoCo. According to TipRanks, Zackfia has an average return of 13.0% and a 55.90% success rate on recommended stocks.

In another report released on May 15, TD Cowen also maintained a Buy rating on the stock with a $25.00 price target.