Sweetgreen: A cheap entrance into the fast casual sector

Ferox Point Equity Research is bullish on Sweetgreen (Ticker: SG). Below is a summary of our thesis. Read the full report by clicking on the “READ FULL REPORT” button.

Sweetgreen is positioned in the fast casual sector, which blends the speed/affordability of fast food with the quality/health of casual dining. Chipotle serves as a precedent that the fast casual model is scalable and profitable. Sweetgreen mirrors this model with customizable salad bowls and increased cuisine variety. Sweetgreen is also a leader in innovation in the food service space as they are using automation to cut down on labor costs. Sweetgreen trades at lower multiples than peers such as Chipotle or CAVA, making it an attractive opportunity to gain cheap exposure to the growing fast casual space. Their revenue is growing year over year and losses are due to heavy reinvestment and not bad business. Furthermore, Sweetgreen bolsters a resilient balace sheet, with no debt and cash reserves in excess of 230 million. Their current low stock price is due to sector wide macroeconomic pressures and not structural weaknesses.

This report is provided for informational and research purposes only and does not constitute financial, investment, or trading advice. Nothing contained herein should be construed as a recommendation to buy, sell, or hold any security. All opinions expressed are those of Ferox Point Equity Research at the time of publication and are subject to change without notice.

Ferox Point Equity Research, its members, and affiliates may hold positions in securities mentioned in this report, including but not limited to Sweetgreen, Inc. (SG).

Past performance is not indicative of future results. Investors should conduct their own due diligence before making any investment decisions.