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Sweetgreen (SG)
NYSE:SG
US Market

Sweetgreen (SG) AI Stock Analysis

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SG

Sweetgreen

(NYSE:SG)

Rating:55Neutral
Price Target:
$13.00
▼( -1.96% Downside)
Sweetgreen's stock score reflects mixed financial health and technical outlook. The company's expanding growth and operational improvements are positive, but profitability issues and bearish technical indicators weigh heavily. While the earnings call offered encouraging guidance, the valuation remains a concern due to unprofitability. Investors should weigh potential growth against current financial and market challenges.
Positive Factors
Customer Acquisition
Sweetgreen's new customer acquisition remains strong as the company successfully widened its customer funnel and occasion usage with items such as protein plates, steak, and Ripple Fries.
Revenue Potential
There is potential for Sweetgreen to ultimately generate annual revenue of more than $3.5 billion on at least 1,200 locations based on saturation analysis.
Sales Performance
The Willis Tower retrofit was seeing very strong same store sales while the Penn Plaza and Wall Street retrofits in NYC are outperforming the rest of the market.
Negative Factors
Customer Softness
This is a busy year for SG with a numbers of drivers - fries, loyalty, seasonal items, more IK, another COO change, collabs, and more - which for now, are not enough to offset customer softness.
Guidance Revision
April comp was meaningfully below expectations, leading to downwardly revised guidance.
Sales Decline
April comps decelerated to the negative midsingle-digit range due to outsized weakness in the urban lunch business and reduced frequency.

Sweetgreen (SG) vs. SPDR S&P 500 ETF (SPY)

Sweetgreen Business Overview & Revenue Model

Company DescriptionSweetgreen, 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 MoneySweetgreen 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
42
Neutral
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
55
Neutral
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
48
Neutral
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 2024Dec 2023Dec 2022Dec 2021Dec 2020
Income StatementTotal Revenue
676.83M584.04M470.11M339.87M220.62M
Gross Profit
132.95M101.92M69.29M40.41M-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 SheetCash, Cash Equivalents and Short-Term Investments
214.79M257.23M331.61M471.97M102.64M
Total Assets
856.76M912.25M908.93M762.65M265.68M
Total Debt
330.71M302.87M300.74M0.000.00
Net Debt
115.92M45.63M-30.88M-471.97M-102.64M
Total Liabilities
410.61M429.66M367.71M109.53M573.04M
Stockholders Equity
446.14M482.60M541.23M653.12M-307.36M
Cash FlowFree Cash Flow
-41.07M-69.31M-145.43M-157.30M-147.25M
Operating Cash Flow
43.39M26.48M-43.17M-64.53M-90.35M
Investing Cash Flow
-92.21M-95.67M-102.02M-97.55M-58.41M
Financing Cash Flow
8.89M-5.20M4.63M531.61M2.15M

Sweetgreen Technical Analysis

Technical Analysis Sentiment
Negative
Last Price13.26
Price Trends
50DMA
20.27
Negative
100DMA
24.42
Negative
200DMA
30.12
Negative
Market Momentum
MACD
-1.92
Positive
RSI
28.13
Positive
STOCH
10.39
Positive
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 13.26 is below the 20-day moving average (MA) of 16.92, below the 50-day MA of 20.27, and below the 200-day MA of 30.12, indicating a bearish trend. The MACD of -1.92 indicates Positive momentum. The RSI at 28.13 is Positive, neither overbought nor oversold. The STOCH value of 10.39 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for SG.

Sweetgreen Risk Analysis

Sweetgreen disclosed 61 risk factors in its most recent earnings report. Sweetgreen reported the most risks in the “Finance & Corporate” category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 1 New Risks
1.
Changes to U.S. trade policy, including the imposition of tariffs, may have an adverse effect on our business, financial condition, and results of operations. Q4, 2024

Sweetgreen Peers Comparison

Overall Rating
UnderperformOutperform
Sector (62)
Financial Indicators
Name
Overall Rating
Market Cap
P/E Ratio
ROE
Dividend Yield
Revenue Growth
EPS Growth
75
Outperform
$876.84M27.127.37%4.57%6.89%
73
Outperform
$2.59B16.4346.60%2.06%4.42%48.23%
68
Neutral
$5.00B397.222.70%14.07%-47.47%
WEWEN
66
Neutral
$2.21B12.2790.40%8.61%2.18%-5.15%
62
Neutral
$6.88B11.262.78%3.93%2.65%-22.00%
58
Neutral
$999.07M89.271.86%14.43%-53.71%
SGSG
55
Neutral
$1.56B-19.79%11.10%18.05%
* Consumer Cyclical Sector Average
Performance Comparison
Ticker
Company Name
Price
Change
% Change
SG
Sweetgreen
13.26
-19.26
-59.23%
CAKE
Cheesecake Factory
52.35
15.74
42.99%
WEN
Wendy's
11.50
-5.25
-31.34%
SHAK
Shake Shack
117.29
19.78
20.29%
FWRG
First Watch Restaurant Group
15.91
-3.89
-19.65%
PTLO
Portillo's
11.72
1.74
17.43%

Sweetgreen Earnings Call Summary

Earnings Call Date:May 08, 2025
(Q1-2025)
|
% Change Since: -27.02%|
Next Earnings Date:Aug 06, 2025
Earnings Call Sentiment Neutral
The earnings call revealed a mix of positive developments and challenges. Sweetgreen highlighted new restaurant openings, successful menu innovations, and operational improvements. However, these were tempered by a decline in same store sales, challenges in key markets, and the potential impact of tariffs.
Q1-2025 Updates
Positive Updates
Five New Restaurant Openings
Sweetgreen opened five new restaurants in Q1 2025, with locations in Philadelphia, New York metro area, Richmond, and Milwaukee. The 2024 class of new restaurants delivered a Q1 margin of 18.3%.
Infinite Kitchen and Sweetlane Success
The Infinite Kitchen format showed strong results with significant margin leverage and improved efficiency. The Sweetlane in Schaumburg, Illinois, saw comparable sales grow more than 20% year-over-year.
Menu Innovation and SG Rewards Launch
Successful nationwide launch of Ripple Fries and a new collaboration with COTE Korean Steakhouse for a Korean barbecue inspired menu. The reimagined loyalty program, SG Rewards, has added 20,000 new digital customers a week since its launch.
Operational Improvements
Implementation of AI-powered workforce management system led to increased average weekly hours by nearly 10% and reduced absentee rates by nearly 50%.
Negative Updates
Same Store Sales Decline
Q1 2025 same store sales declined by 3.1%, with a mid-single digit decline in April, reflecting a broader consumer slowdown and external uncertainties.
Challenges in Major Markets
Major markets like New York, Boston, and Los Angeles experienced softer sales trends due to consumer sentiment decline and operational inconsistencies.
Impact of Tariffs
Tariffs are expected to impact the supply chain, restaurant build-out costs, and Infinite Kitchen expenses, with potential cost increases of about 10% for build-outs.
Company Guidance
During Sweetgreen's Q1 2025 earnings call, the company reported sales of $166.3 million and a same-store sales decline of 3.1%, which was at the higher end of their guidance range. Despite external challenges such as holiday timing shifts and adverse weather, they achieved a restaurant-level profit margin of 17.9% and slight adjusted EBITDA profitability, both exceeding their outlook. Sweetgreen opened five new restaurants, contributing to year-to-date revenue growth, and highlighted the success of its Infinite Kitchen and sweetlane formats, which drove significant operational efficiencies and sales increases. They reiterated their 2025 guidance, aiming for 40 new restaurant openings with revenue between $740 million and $760 million, same-store sales growth approximately flat, and an adjusted EBITDA of around $30 million. The company also introduced new menu innovations, such as Ripple Fries, which improved same-store sales, and a collaboration with COTE Korean Steakhouse, reflecting their focus on culinary innovation and customer engagement.

Sweetgreen Corporate Events

Executive/Board ChangesBusiness Operations and Strategy
Sweetgreen Appoints Jason Cochran as COO
Positive
Apr 29, 2025

On April 29, 2025, Sweetgreen announced the appointment of Jason Cochran as Chief Operating Officer, effective May 5, 2024. Cochran, bringing over 25 years of operational leadership experience, will oversee Field Operations and Operations Services and Innovation, reporting directly to CEO Jonathan Neman. His previous roles include CEO of American West Restaurant Group and Vice President of Operations Services at Chipotle Mexican Grill. Cochran’s appointment is expected to support Sweetgreen’s growth and operational excellence, aligning with the company’s mission to scale its impact across communities.

Executive/Board ChangesBusiness Operations and Strategy
Sweetgreen COO Rossann Williams Steps Down
Neutral
Apr 17, 2025

On April 16, 2025, Sweetgreen, Inc. announced that Chief Operating Officer Rossann Williams would leave her position immediately, transitioning to a consulting role until June 1, 2025. This change may impact Sweetgreen’s operational strategies and stakeholder relations as the company navigates this leadership transition.

Executive/Board ChangesShareholder Meetings
Sweetgreen Announces New Board Members for 2025
Neutral
Mar 28, 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.

Glossary
OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.
NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.
UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.

Disclaimer

This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.