The fast-casual salad chain was up thanks to a bullish note from an analyst. Shares of fast-casual salad chain Sweetgreen (SG 4.26%) were moving higher today as the company got a bullish note from a Wall Street analyst. The stock was up 4.5% at 1:50 p.m. ET. Sweetgreen stock could be a buy heading into its earnings report Oppenheimer analyst Brian Bittner weighed in on Sweetgreen this morning, calling the restaurant stock a top pick heading into its second-quarter earnings report on Aug. 8. A recent pullbac ...

During its testing phase in Boston, the Caramelized Garlic Steak quickly became a dinner-time favorite. In fact, 20% of all dinner orders included steak. The market test was an unbridled success as it started to roll out steak across all its restaurants. In 2021, Sweetgreen acquired Spyce, a restaurant that uses automated robots designed by MIT engineers to prepare lunch bowls. This acquisition was seen as a stepping stone for future restaurant concepts leading up to its IPO. Projected Earnings Growth Growi ...

Core Insights - Cava Group and Sweetgreen are both emerging fast-casual restaurant chains focusing on healthy, eco-conscious meals, with Cava specializing in Mediterranean cuisine and Sweetgreen in salads [1][12] - Both companies are relatively new IPOs, making their financial track records limited and subject to inflationary pressures [2] Financial Performance - Cava reported a Q1 sales growth of 30.3% year-over-year, while Sweetgreen achieved 26% [3] - Cava's same-store sales growth was 2.3%, compared to Sweetgreen's 5% [3] - Cava has a total of 323 restaurants and opened 14 new locations in Q1, while Sweetgreen has 225 restaurants with 6 new openings [3] - Cava's full-year new restaurant guidance is 52, while Sweetgreen's is 25 [3] - Cava's net income for Q1 was $14 million, reflecting an 800% growth year-over-year, while Sweetgreen reported a net loss of $26.1 million [9] - Cava's restaurant profit margin stands at 25.2%, with guidance of 24%, whereas Sweetgreen's margin is 18% with guidance of 19% [9] Market Sentiment and Valuation - Cava has consistently beaten Wall Street's earnings expectations for the past four quarters, while Sweetgreen has missed expectations in the same timeframe [5] - Cava's price-to-sales ratio is significantly higher than Sweetgreen's, indicating potential overvaluation but also reflecting positive investor sentiment [6] - Both stocks have seen substantial gains this year, with Cava up 90% and Sweetgreen up 123% year-to-date, although they are facing recent pressures due to indications of slowing restaurant spending [11][7] Growth Potential - Cava appears to have a competitive edge over Sweetgreen in terms of growth and profitability, which may enhance its ability to create shareholder value in the long term [12][8]

Company Performance - Sweetgreen, Inc. is expected to report earnings of -$0.11 per share on August 8, 2024, reflecting a year-over-year growth of 45% [1] - The consensus estimate for revenue is projected at $180.03 million, indicating an 18.03% increase from the same quarter last year [1] - For the full year, earnings are projected at -$0.72 per share and revenue at $671.95 million, representing changes of +25.77% and +15.05% respectively from the prior year [8] Stock Performance - Sweetgreen, Inc. shares have decreased by 18.75% over the last month, underperforming the Retail-Wholesale sector's loss of 0.03% and the S&P 500's gain of 1.08% [4] - The stock closed at $24.20, showing a +1.38% change from the previous session, outperforming the S&P 500's daily loss of 0.71% [7] Analyst Estimates - Recent adjustments to analyst estimates for Sweetgreen, Inc. indicate changing near-term business trends, with positive revisions seen as a sign of optimism [5] - The Zacks Rank system currently rates Sweetgreen, Inc. as 2 (Buy), with a 0.34% rise in the Zacks Consensus EPS estimate over the past month [9] Industry Context - The Retail - Restaurants industry, which includes Sweetgreen, Inc., has a Zacks Industry Rank of 148, placing it in the bottom 42% of over 250 industries [6]

Core Viewpoint - Sweetgreen (NYSE:SG) has experienced a significant stock price increase of over 120% year-to-date, driven by strong business performance and future automation plans with robotics [1] Automation Strategy - Sweetgreen opened its first fully automated location, "Infinite Kitchen," in May 2023, capable of producing up to 500 salad bowls per hour, which enhances operational efficiency and customer experience [6] - Labor costs account for 29% of Sweetgreen's revenue, and automation is expected to improve margins, with the first Infinite Kitchens generating a 10-point operating margin benefit compared to other locations [6] - The company plans to open approximately seven new Infinite Kitchen restaurants and retrofit three to four existing locations by 2024, with each retrofit costing between $450,000 and $500,000 [6] Financial Performance - Sweetgreen is guiding for same-store sales growth of 4-6% year-over-year for FY24, with Q1 same-store sales growth at 5% [7] - The company has a healthy cash reserve of $243.7 million, which is unencumbered by debt, providing a solid financial foundation for its expansion plans [6] Competitive Positioning - Sweetgreen's food margin is slightly higher than competitors like CAVA and Chipotle, with food costs representing 27.7% of revenue compared to 28.6% for CAVA and 28.8% for Chipotle [15][16] - The company has a unique subscription model, Sweetpass+, which offers daily savings to loyal customers, encouraging repeat business [18] Market Trends - The fast-casual restaurant sector, including Sweetgreen, is benefiting from health food trends, with Sweetgreen positioned to capitalize on this growing consumer interest [23] - Sweetgreen's automation efforts and same-store sales growth are expected to create a substantial profit margin gap compared to peers, particularly as the industry continues to evolve [19]

Core Insights - Sweetgreen's stock experienced a significant increase of 166.7% in the first half of 2024, outperforming the S&P 500's 14.5% gain [1] - The company reported a reacceleration in growth, with a 29% increase in revenue for Q4 2023 compared to 23% in the prior year, and a 26% increase in Q1 2024 compared to 22% in Q1 2023 [2] Financial Performance - Despite the growth in revenue, Sweetgreen faced challenges with profitability, reporting an operating loss of $27 million in Q1 2024 and $122 million for the entire year of 2023 [4] - The company's general and administrative expenses were nearly $37 million in Q1 2024, but when adjusted for these expenses, the operating margin at the restaurant level was 18% [5] Market Concerns - In July 2024, Sweetgreen's stock declined by 20%, raising concerns about consumer spending and its impact on the company's growth potential [3][6] - The price-to-sales (P/S) ratio for Sweetgreen stock has decreased slightly after the July pullback, but some investors still consider a P/S of 4 to be too high [7][8] Future Outlook - There is skepticism regarding Sweetgreen's ability to scale and achieve profitability, which could affect shareholder value [8] - Conversely, if the company can successfully grow its sales and become profitable, the current stock price may be viewed as a bargain in the future [9]

Unlike Cava, Sweetgreen was a dud after its initial IPO pop. It went public at $28 in 2021, briefly trading north of $50 before whittling its way down to the high single digits by late last year. The starting line matters here. Sweetgreen is growing roughly in line with Cava these days. Revenue rose 26% in its latest quarter on a 5% uptick in comps. However, it's still not profitable. It wasn't easy to double in 2024, but these three stocks made it happen. They might be able to do it again. Cava (CAVA -0.67 ...

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]