Sweetgreen (SG) Stock Forecast & Price Target

Sweetgreen Inc. exhibits a strong potential for profitability, bolstered by anticipated continued top-line growth and improvements in operational scale, allowing for better leverage of fixed corporate costs and investments. The company's ability to enhance restaurant margins from 17.5% in 2023 to potentially surpass previous peak margins of 19% in 2014 is supported by increased average unit volumes driven by menu innovation and marketing strategies. Furthermore, Sweetgreen's focus on expanding its customer base and evening dining options, coupled with the promising growth of Infinite Kitchens, positions it well for sustained competitive advantages and substantial unit growth in the foreseeable future.

Sweetgreen's fourth quarter performance showed revenues that were largely in-line; however, same-store sales (SSS) fell short by 190 basis points compared to expectations, and the company's 2025 SSS guidance midpoint was 210 basis points below consensus. Factors such as adverse weather conditions, the impact of LA fires, and holiday timing have significantly hindered short-term growth, with traffic remaining flat in the fourth quarter and disappointing trends in key markets leading to lowered revenue and EBITDA estimates for both 2025 and 2026. Additionally, the overall investor sentiment has become increasingly negative, influencing forecasts of reduced restaurant-level margins and overall financial performance moving forward.