The Sweetgreen stock price has done well this year, and is one of the best performers on Wall Street. SG has soared by 190% in 2024, bringing its market cap to over $4 billion. So, how will the SG stock price perform in 2025?
Sweetgreen has become a popular salad chain
Sweetgreen is a fast-growing restaurant chain that owns and operates 221 salad restaurants in 18 states. It offers 13 core meals, the ingredients of which are mostly sourced from about 200 domestic food partners and farmers.
Sweetgreen’s business is doing well, with its revenue growth continuing and its losses narrowing. Its annual revenue crashed to $220 million in 2020 because of the Covid-19 pandemic, and then rebounded to over $668 million in the trailing twelve months (TTM).
Most importantly, Sweetgreen’s losses are falling as the company aims to being profitable in the next few years. Its annual loss rose from $141 million in 2020 to $190 million in 2022. It then narrowed the loss to $113 million in 2023 and just $88 million in the TTM.
Sweetgreen – and CAVA Group – stocks have also surged as investors compared them with Chipotle Mexican Grill (CMG), a company that has become a $83 billion juggernaut in the restaurant industry.
Chipotle’s business grew by focusing on a few dishes and investing in food deliveries and Chipotlane, its drive-through service.
Sweetgreen growth is slowing
The Sweetgreen stock price has dropped by over 24% from the year-to-date high as concerns about its momentum continue.
The most recent results showed that its revenue rose to $173.4, a 13% increase from the $153.4 million it made in the same period a year earlier. In contrast, CAVA Group’s revenue rose by 39% to $241 million as it added 11 new stores. Sweetgreen opened 5 new restaurants during the quarter.
Sweetgreen’s revenue growth was on par with that of Chipotle, which grew by 13% to over $2.8 billion. Its total digital revenue was about 55% of its business, while its restaurant-level profit was almost $35 million.
Analysts expect that Sweetgreen’s revenue will be $163.3 million in the current quarter, a 6.7% increase from the same quarter a year ago. Its revenue is expected to be $679 million for the year, a 16% increase from the same period last year.
Sweetgreen’s revenue is then expected to surge to $792.57 million in 2025. Also, its loss per share will drop from 56 cents to 4 cents as the management aims for profitability.
A key challenge for Sweetgreen is that its business is highly overvalued, considering that its growth is on par with that of a company like Chipotle. It trades at a forward sales of 5.98, much higher than other restaurant chains
The other big issue is that it is a fairly low-margin business. Sweetgreen’s gross margins stands at about 18%, much lower than Chipotle’s 40% and Cava’s 37%.
Sweetgreen stock price analysis
Sweetgreen stock chart by TradingView
The daily chart shows that the Sweetgreen share price peaked at $45 in November and then slightly reversed to the current $33.15. This retreat happened after the stock formed a popular bearish chart pattern, a rising wedge. It has dropped below the lower side of this wedge pattern.
The Relative Strength Index (RSI) and the MACD indicators have formed a bearish divergence pattern. Therefore, the short-term outlook for SG stock is bearish, with the next point to watch being at $22.42, its lowest swing in July. It will then stage another rally and possibly soar above its all-time high of $45.
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