Here's Why Sweetgreen Stock Was Up a Stunning 167% in the First Half of 2024

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]