krblokhin
When we think of value stocks, a high-flying restaurant chain that has seen its share price triple year-to-date hardly comes to mind. And yet at the same time, I believe Sweetgreen (NYSE:SG) to be undervalued.
To me, the concept
Sweetgreen Is Cheap By One Metric, And I Recommend Buying The Dip
Summary
- Shares of Sweetgreen have dropped ~25% from peaks, creating a tremendous buying opportunity.
- Sweetgreen is valued at $14.8 million per store, much lower than Cava's $35.6 million and Chipotle's $22 million.
- Sweetgreen's average unit sales per store, meanwhile, are very similar to both Cava and Chipotle.
- Its restaurant-level margin is currently ~20%, lower than ~25% for peers. However, its automation efforts are poised to eventually vault margins to the high 20s.
With combined experience of covering technology companies on Wall Street and working in Silicon Valley, and serving as an outside adviser to several seed-round startups, Gary Alexander has exposure to many of the themes shaping the industry today. He has been a regular contributor on Seeking Alpha since 2017. He has been quoted in many web publications and his articles are syndicated to company pages in popular trading apps like Robinhood.
Analyst’s Disclosure:I/we have a beneficial long position in the shares of SG either through stock ownership, options, or other derivatives. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.
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