William Blair analyst Sharon Zackfia has maintained their neutral stance on SG stock, giving a Hold rating yesterday.
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Sharon Zackfia’s rating is based on Sweetgreen’s recent financial performance and future outlook. The company reported disappointing third-quarter results, with adjusted EBITDA turning negative and comparable sales declining more than expected. This trend of declining comps has persisted for three consecutive quarters, raising concerns about the company’s ability to reverse this trajectory.
Furthermore, Sweetgreen faces challenges with a significant portion of its consumer base, particularly among 25- to 35-year-olds, which adds uncertainty to the timing of a potential recovery. Although the company has taken steps to improve liquidity and plans to reduce SG&A expenses, the anticipated losses in the latter half of the year are concerning. While the valuation remains attractive, investor skepticism is likely to persist until there is clear evidence of a sustainable turnaround. Consequently, Zackfia has assigned a Hold rating, reflecting the need for more visibility on the company’s path to recovery.
According to TipRanks, Zackfia is a 4-star analyst with an average return of 5.3% and a 43.88% success rate. Zackfia covers the Consumer Cyclical sector, focusing on stocks such as Birkenstock Holding plc, CarMax, and Royal Caribbean.
In another report released yesterday, TD Cowen also maintained a Hold rating on the stock with a $6.00 price target.