Read This Before Buying Sweetgreen Stock​

• Sweetgreen banal is trading astatine a inexpensive valuation.

• Its tiny store fleet has been falling abbreviated of operational standards, though they're making progress.

• The high-inflation situation isn't affable to income growth.

• 10 stocks we similar amended than Sweetgreen ›

Sweetgreen (NYSE: SG) is simply a tiny but increasing concatenation of fast-casual restaurants, 1 of respective that person cropped up implicit the past fewer years successful the aftermath of Chipotle Mexican Grill's large success. Although it continues to unfastened caller stores, it's faced respective problems, some interior and external, that person impeded its ain success, and its banal terms has dropped 76% implicit the past year.

It mightiness look similar an charismatic worth astatine this point, trading astatine lone 1.4 times trailing 12-month sales. But if you're considering buying the stock, work this first.

Sweetgreen operates astir 280 restaurants crossed the country, and it's opening them astatine a reasonably dilatory rate; it guided for 37 store openings successful 2025, and it's readying to unfastened different 15 to 20 stores successful 2026.

There's been a batch of alteration astatine Sweetgreen recently, arsenic good arsenic immoderate interior issues that are keeping it from increasing and expanding faster. Its restaurants had fallen beneath its operational standards, with lone one-third gathering them earlier a reorganization and turnaround plan. The latest update says that 60% presently conscionable the standards. That's steadfast improvement, but it inactive has a mode to go.

It's moving connected 5 antithetic areas: operational excellence, marque relevance, nutrient prime and paper innovation, the integer experience, and profitability. That's a lot, but if it continues to marque progress, determination volition astir apt beryllium a domino effect whereby each of the enactment gets the institution to each oregon astir of these goals. Management has made respective caller hires to instrumentality an enactment plan, and considering its show today, it whitethorn not beryllium excessively hard to study immoderate benignant of progress.

In the 2025 fiscal 3rd 4th (ended Sept. 28), income dropped 0.6% twelvemonth implicit year, and comparable income (comps) were down 9.5%. It reported a $36.3 cardinal operating nonaccomplishment and a restaurant-level nett borderline of 13.1%, down from 20.1% the twelvemonth before.

Unfortunately, the outer situation mightiness marque a betterment much challenging. Inflation is inactive high, and different fast-casual chains, specified arsenic Chipotle and Cava, are besides feeling unit successful their comps growth, though not arsenic severely arsenic Sweetgreen.

The question is whether Sweetgreen is simply a bargain astatine the existent terms oregon a worth trap, and the reply mightiness beryllium connected your hazard tolerance. If Sweetgreen continues to marque advancement connected its goals, it could beryllium a existent turnaround communicative and connection worth astatine the existent price. However, that's not a given, and it could beryllium different down twelvemonth for Sweetgreen.