Barclays has commenced coverage of Sweetgreen (SG, Financial), assigning it an Equal Weight rating and setting a price target of $16. Although Sweetgreen is recognized for its leading position in comparable sales and unit expansion within the industry, the company's recent performance has shown a slowdown in comparable sales growth. Additionally, there is ongoing discussion concerning Sweetgreen's potential market reach in the U.S.
Barclays highlights that despite Sweetgreen's impressive growth metrics, determining an appropriate valuation is complex, given its leadership on several industry fundamentals. Presently, Sweetgreen's stock trades at a slight markdown compared to its high-growth peers due to its recent underwhelming sales performance, with projections indicating stable growth by 2025.
Wall Street Analysts Forecast
Based on the one-year price targets offered by 9 analysts, the average target price for Sweetgreen Inc (SG, Financial) is $24.44 with a high estimate of $30.00 and a low estimate of $15.00. The average target implies an upside of 75.86% from the current price of $13.90. More detailed estimate data can be found on the Sweetgreen Inc (SG) Forecast page.
Based on the consensus recommendation from 12 brokerage firms, Sweetgreen Inc's (SG, Financial) average brokerage recommendation is currently 2.1, indicating "Outperform" status. The rating scale ranges from 1 to 5, where 1 signifies Strong Buy, and 5 denotes Sell.
Based on GuruFocus estimates, the estimated GF Value for Sweetgreen Inc (SG, Financial) in one year is $25.63, suggesting a upside of 84.39% from the current price of $13.9. GF Value is GuruFocus' estimate of the fair value that the stock should be traded at. It is calculated based on the historical multiples the stock has traded at previously, as well as past business growth and the future estimates of the business' performance. More detailed data can be found on the Sweetgreen Inc (SG) Summary page.
SG Key Business Developments
Release Date: May 08, 2025
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Sweetgreen Inc (SG, Financial) reported sales of $166.3 million for the first quarter, which was toward the higher end of their guidance range.
- The company achieved a restaurant-level profit margin of 17.9% and slight adjusted EBITDA profitability, both above their provided outlook.
- Sweetgreen Inc (SG) opened five new restaurants in various markets, demonstrating confidence in their real estate strategy and long-term growth opportunities.
- The Infinite Kitchen format is delivering strong results, showing meaningful margin leverage and higher native digital sales.
- The nationwide launch of the SG Rewards loyalty program has seen strong adoption, adding 20,000 new digital customers per week.
Negative Points
- Same-store sales declined by 3.1% in the first quarter, reflecting a negative impact from traffic and mix.
- April sales trends were soft, attributed to a broader consumer slowdown, particularly in major markets like New York, Boston, and Los Angeles.
- The macro environment remains uncertain and volatile, with consumer sentiment falling sharply.
- Tariffs are expected to impact supply chain costs, restaurant build-out costs, and the Infinite Kitchen, potentially increasing costs by 10%.
- Operational inconsistencies in service, speed, and portioning highlight the need for sharper discipline and tighter systems integration.
