Sweetgreen (SG) AI Stock Analysis

• Market Cap: $2.37B
• Dividend Yield: N/A
• Average Volume (3M): 4.41M
• Price to Earnings (P/E): ―
• Beta (1Y): 1.69
• Revenue Growth: 15.89%
• EPS Growth: 22.07%
• Country: US
• Employees: 6,407
• Sector: Consumer Cyclical
• Sector Strength: 55
• Industry: Restaurants
• EPS (TTM): -0.79
• Shares Outstanding: 105,387,460
• 10 Day Avg. Volume: 4,072,100
• 30 Day Avg. Volume: 4,406,836
• PEG Ratio: N/A
• Price to Book (P/B): N/A
• Price to Sales (P/S): 4.32
• Price to Cash Flow (P/CF): 119.50
• P/FCF Ratio: 119.30
• Enterprise Value/Market Cap: N/A
• Enterprise Value/Revenue: N/A
• Enterprise Value/Gross Profit: N/A
• Enterprise Value/Ebitda: N/A
• 1Y Price Target: $32.50
• Price Target Upside: 67.10% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 12

Sweetgreen demonstrates strong revenue growth and strategic initiatives, especially with the successful expansion of Infinite Kitchens. However, persistent profitability challenges, high expenses, and bearish technical indicators weigh heavily on the stock. The negative P/E ratio and lack of dividend yield further impact its valuation attractiveness. While the earnings call shows potential for future growth, current financial difficulties and external risks remain significant concerns for investors.

Positive Factors

Expansion Potential

Sweetgreen's proven portability across geographies and in the suburbs highlights its robust expansion potential.

Technological Advancements

The rollout of Infinite Kitchens, Sweetgreen’s proprietary robotic assembly make lines, is accelerating expansion efforts.

Negative Factors

Financial Performance

Sweetgreen reported a fourth-quarter adjusted EBITDA loss, missing both the analyst's estimate and consensus expectations.

Sales Performance

Fourth-quarter comps increased 4%, below consensus of 6% as trends decelerated.

Sweetgreen Business Overview & Revenue Model

Company Description

Sweetgreen, Inc., together with its subsidiaries, develops and operates fast-casual restaurants serving healthy foods prepared from seasonal and organic ingredients. The company also accepts orders through its online and mobile ordering platforms, as well as sells gift cards that can be redeemed in its restaurants. As of September 26, 2021, it owned and operated 140 restaurants in 13 states and Washington, D.C. The company was founded in 2006 and is headquartered in Los Angeles, California.

How the Company Makes Money

Sweetgreen makes money primarily through the sale of its food and beverage products at its restaurant locations. The company's revenue model is based on offering a menu that includes customizable salads, grain bowls, and beverages, which are sold at a premium price point due to their focus on quality ingredients and sustainability. Sweetgreen also generates revenue through its digital platform, which includes online ordering and delivery services, enhancing customer convenience and expanding its market reach. Additionally, partnerships with local farmers and suppliers help Sweetgreen maintain its commitment to fresh, locally-sourced ingredients, which is a significant factor in attracting and retaining its customer base.

Sweetgreen Financial Statement Overview

Summary

Sweetgreen shows promising revenue growth but faces challenges with profitability and free cash flow. The balance sheet is stable yet increased debt is a concern. Improvements in cash flow are noted but consistent losses and high expenses remain significant risks.

Income Statement

Sweetgreen's revenue shows a positive growth trend with a significant increase of 15.9% from 2023 to 2024. However, profitability remains a key concern with a negative net profit margin of -13.4% in 2024, though slightly improved from -19.4% in 2023. The gross profit margin is robust at 100% in 2024 due to changes in revenue recognition, yet both EBIT and EBITDA margins are negative, indicating consistent operational challenges.

Balance Sheet

The company maintains a healthy equity position with an equity ratio of 52.1% in 2024, indicating financial stability. However, the debt-to-equity ratio has increased to 0.74, suggesting a higher reliance on debt compared to previous years. Return on equity remains negative at -20.3%, pointing to ongoing profitability issues.

Cash Flow

Operating cash flow has improved to $43.39 million in 2024, reflecting better cash management. However, free cash flow remains negative at -$41.07 million due to high capital expenditures, although this is an improvement over previous years. The operating cash flow to net income ratio is positive, indicating better cash conversion despite net losses.

Breakdown
Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement		Total Revenue
676.83M	584.04M	470.11M	339.87M	220.62M
	Gross Profit
132.95M	101.92M	69.29M	40.41M	-8.70M
	EBIT
-95.70M	-122.34M	-176.07M	-129.38M	-141.59M
	EBITDA
-24.07M	-53.39M	-142.54M	-117.39M	-113.97M
	Net Income Common Stockholders
-90.37M	-113.38M	-190.44M	-153.18M	-141.38M
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
214.79M	257.23M	331.61M	471.97M	102.64M
	Total Assets
856.76M	912.25M	908.93M	762.65M	265.68M
	Total Debt
330.71M	302.87M	300.74M	0.00	0.00
	Net Debt
115.92M	45.63M	-30.88M	-471.97M	-102.64M
	Total Liabilities
410.61M	429.66M	367.71M	109.53M	573.04M
	Stockholders Equity
446.14M	482.60M	541.23M	653.12M	-307.36M
Cash Flow		Free Cash Flow
-41.07M	-69.31M	-145.43M	-157.30M	-147.25M
	Operating Cash Flow
43.39M	26.48M	-43.17M	-64.53M	-90.35M
	Investing Cash Flow
-92.21M	-95.67M	-102.02M	-97.55M	-58.41M
	Financing Cash Flow
8.89M	-5.20M	4.63M	531.61M	2.15M

Sweetgreen Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 19.45
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Negative
• MACD: Negative
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For SG, the sentiment is Negative. The current price of 19.45 is below the 20-day moving average (MA) of 24.02, below the 50-day MA of 25.40, and below the 200-day MA of 31.43, indicating a bearish trend. The MACD of -0.02 indicates Negative momentum. The RSI at 51.17 is Neutral, neither overbought nor oversold. The STOCH value of 52.55 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for SG.

Sweetgreen Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
PTLO	77 Outperform	$810.18M	22.98	8.16%	―	4.51%	43.99%
CAKE	71 Outperform	$2.29B	13.87	41.18%	2.44%	4.13%	56.76%
SHAK	68 Neutral	$3.34B	322.35	2.23%	―	15.18%	-48.78%
WEN	64 Neutral	$2.57B	13.88	68.30%	8.05%	2.98%	-2.58%
FWRG	61 Neutral	$979.70M	50.31	3.27%	―	13.95%	-26.46%
Sector *	59 Neutral	$11.74B	10.16	-1.06%	4.15%	1.27%	-16.61%
SG	47 Neutral	$2.37B	―	-19.46%	―	15.89%	22.07%

Sweetgreen Corporate Events

Sweetgreen Announces New Board Members for 2025

On March 28, 2025, Sweetgreen announced that Youngme Moon and Valerie Jarrett will not seek re-election to the Board of Directors at the 2025 Annual Meeting. Their departure is not due to any disagreements, and they have been praised for their leadership during pivotal moments in the company’s journey from private to public status. In their place, Monty Moran, former co-CEO of Chipotle, and Dawn Ostroff, former Chief Content and Advertising Business Officer at Spotify, have been nominated as new independent directors. Moran and Ostroff bring extensive experience in the restaurant industry, brand building, and digital transformation, which the Board believes will support Sweetgreen’s continued growth and strategic evolution.