Before we discuss the reliability of brokerage recommendations and how to use them to your advantage, let's see what these Wall Street heavyweights think about Sweetgreen, Inc. (SG) . Do you wonder why? As a result of the vested interest of brokerage firms in a stock they cover, their analysts tend to rate it with a strong positive bias. According to our research, brokerage firms assign five "Strong Buy" recommendations for every "Strong Sell" recommendation. When deciding whether to buy, sell, or hold a st ...

Core Viewpoint - The analysis of Sweetgreen, Inc. (SG) highlights the importance of understanding brokerage recommendations and their potential biases, suggesting that investors should validate these recommendations with other analytical tools like the Zacks Rank to make informed investment decisions [1][11]. Group 1: Brokerage Recommendations - The average brokerage recommendation (ABR) for Sweetgreen is 1.92, indicating a rating between Strong Buy and Buy, based on recommendations from nine brokerage firms [16]. - Of the nine recommendations contributing to the current ABR, five are classified as Strong Buy and one as Buy, which together account for 55.6% and 11.1% of all recommendations respectively [3]. - The ABR is calculated based on brokerage recommendations and is typically displayed with decimals, while the Zacks Rank is a quantitative model based on earnings estimate revisions, displayed in whole numbers from 1 to 5 [12]. Group 2: Zacks Rank and Earnings Estimates - The Zacks Consensus Estimate for Sweetgreen's current year earnings remains unchanged at -$0.73 over the past month, indicating stability in analysts' views regarding the company's earnings prospects [9][15]. - The Zacks Rank for Sweetgreen is currently 3 (Hold), suggesting that the stock may perform in line with the broader market in the near term due to the unchanged consensus estimate [15]. - The Zacks Rank is driven by earnings estimate revisions, which are strongly correlated with near-term stock price movements, making it a timely predictor of future stock prices [7][8]. Group 3: Analyst Bias and Investment Strategy - Brokerage analysts often exhibit a positive bias in their recommendations due to vested interests, leading to a higher number of Strong Buy recommendations compared to Strong Sell [4][6]. - It is advised that investors should not rely solely on the ABR for investment decisions, as studies indicate that brokerage recommendations have limited success in guiding investors towards stocks with significant price appreciation potential [17]. - The interests of brokerage firms may not align with those of retail investors, suggesting that investors should use brokerage recommendations to complement their own analysis or other reliable tools [11].

Company Performance - Sweetgreen, Inc. (SG) closed at $32.60, reflecting a +0.9% increase from the previous day, outperforming the S&P 500's gain of 0.26% [1] - The stock has risen by 2.38% over the past month, while the Retail-Wholesale sector has seen a loss of 0.54% and the S&P 500 has gained 3.25% [1] Earnings Expectations - Analysts expect Sweetgreen, Inc. to report earnings of -$0.12 per share, indicating a year-over-year growth of 40% [2] - Revenue is anticipated to be $180.2 million, representing an 18.14% increase from the same quarter last year [2] Full Year Projections - For the full year, earnings are projected at -$0.73 per share and revenue at $672.14 million, reflecting changes of +24.74% and +15.08% respectively from the prior year [3] - Recent changes in analyst estimates suggest a positive outlook regarding the company's business and profitability [3] Analyst Ratings - The Zacks Rank system, which evaluates estimate changes, currently ranks Sweetgreen, Inc. at 3 (Hold) [5] - The consensus EPS projection has decreased by 2.47% in the past 30 days [5] Industry Context - The Retail - Restaurants industry, part of the Retail-Wholesale sector, has a Zacks Industry Rank of 163, placing it in the bottom 36% of over 250 industries [6] - Research indicates that top-rated industries outperform the bottom half by a factor of 2 to 1 [6]

Company Overview - Sweetgreen, Inc. (SG) shares increased by 12.8% to $34.98 in the last trading session, with a notable trading volume and a 33.3% gain over the past four weeks [1][2] - The company is expected to report a quarterly loss of $0.12 per share, reflecting a year-over-year improvement of 40%, with revenues projected at $180.2 million, an 18.1% increase from the previous year [4] Financial Performance - The consensus EPS estimate for Sweetgreen has been revised 4.2% higher in the last 30 days, indicating a positive trend that typically correlates with stock price appreciation [3][4] - The increase in fiscal 2024 outlook, driven by new restaurant openings, favorable menu pricing, and operational excellence, has contributed to bullish investor sentiment [2] Industry Context - Sweetgreen operates within the Zacks Retail - Restaurants industry, which includes other companies like Meritage Hospitality Group Inc. (MHGU), whose stock closed 0.6% lower at $17.40, with a -5.8% return over the past month [5] - Meritage Hospitality Group's EPS estimate remains unchanged at $0.17, representing a year-over-year change of 156.7% [6]

Core Insights - Sweetgreen's stock surged 37% last month following a strong earnings report and the announcement of its expanding robotic kitchen program, Infinite Kitchen [2] - The company reported a 26% increase in revenue for the first quarter, reaching $157.9 million, surpassing estimates of $152 million [3] - Sweetgreen's comparable sales growth was 5%, indicating improved performance at existing stores and revenue growth through expansion [3] Financial Performance - The average unit volume for Sweetgreen's restaurants was $2.9 million, comparable to leading restaurant operators like Chipotle [3] - Adjusted EBITDA was $0.1 million, a significant improvement from a loss of $6.7 million in the same quarter last year [3] - The restaurant-level profit margin increased from 14% to 18%, while the GAAP per-share loss improved from $0.30 to $0.23, although it was worse than the expected loss of $0.16 [3] Future Outlook - Sweetgreen raised its revenue guidance for the year to $660 million to $675 million, up from a previous range of $655 million to $670 million [4] - The company also increased its same-store sales growth guidance from 3%-5% to 4%-6% and raised its restaurant-level profit margin forecast to 18.5%-20% [4] - The fast-casual salad market presents significant growth opportunities for Sweetgreen if it can achieve profitability [4]

Our research demonstrates that these adjustments in estimates directly associate with imminent stock price performance. To exploit this, we've formed the Zacks Rank, a quantitative model that includes these estimate changes and presents a viable rating system. The Zacks Rank system, ranging from #1 (Strong Buy) to #5 (Strong Sell), possesses a remarkable history of outdoing, externally audited, with #1 stocks returning an average annual gain of +25% since 1988. Within the past 30 days, our consensus EPS pro ...

Key PointsSweetgreen is a fast-casual restaurant chain specializing in healthy, sustainable, locally sourced salads and bowls.Sweetgreen posted an adjusted EBITDA of $100,000 in Q1 2024, an improvement from a loss of $6.7 million in the year-ago period.Sweetgreen raised full-year 2024 revenue guidance to $660 million to $675 million, up from $655 to $670 million.5 stocks we like better than SweetgreenFast casual restaurant chain Sweetgreen Inc. NYSE: SG shares catapulted 34% on its Q1 2024 earnings report. ...

Sweetgreen shares surged 35% on Friday after the company topped Wall Street's revenue expectations for the first quarter.The salad chain reported $158 million in revenue, beating the LSEG consensus estimate of $152 million. It is an increase of 26% from the prior-year period, when it reported revenue of $125.1 million.Sweetgreen also raised revenue and adjusted EBITDA guidance for the full year. Shares of the company are up 189% so far in 2024.CEO and co-founder Jonathan Neman said on the earnings call with ...

Key TakeawaysSweetgreen beat revenue estimates and raised its outlook as new restaurants and a boost in menu prices drove up sales.Same-store sales and restaurant-level profit margin also rose.The news sent shares soaring to their highest level in more than two years. Shares of Sweetgreen (SG) skyrocketed over 40% in early trading Friday after the salad restaurant chain posted better-than-expected sales and boosted its guidance as it expanded operations and raised prices. The company reported first-quarter ...

The company is on track for its first full year of adjusted profits.Shares of salad restaurant chain Sweetgreen (SG 38.05%) popped on Friday after the company beat expectations across the board for its first quarter of 2024. As of 10 a.m. ET, Sweetgreen stock was up a stunning 40% and hitting 52-week highs.Sweetgreen starts the year off strongSweetgreen underpromised and overdelivered for its Q1. The company opened six new restaurants during the quarter, and same-store sales increased 5%, as opposed to mana ...