Sweetgreen stock is one to watch in 2022 after this year’s IPO
Jonathan Neman, Nicolas Jammet and Nathaniel Ru Sweetgreen are at the NYSE on November 18, 2021
One of the last entries in a hot year for restaurant IPO stock may be more interesting than the others. It could build a new category or show the potential of technology investments.
Restaurant stocks have performed well this year after a tough 2020. This was due to investors being more confident in the sector thanks to vaccinations and loosening restrictions. Five restaurant companies including Krispy KremeAnd Dutch BrosThe company chose to make its initial public offering public with mixed results.
Sweetgreen only debuted in mid-NovemberIt has not yet reported quarterly earnings. Initial public offering of the salad chain was $28 per share. After a 76% increase in trading volume, the stock has plummeted 35% due to concerns about its omicron derivative. Some are still optimistic about the stock’s future.
Sweetgreen is currently in the initial stages of creating a category within the restaurant industry. This opportunity comes about once every ten years after the IPO. [Starbucks]1992 [Chipotle Mexican Grill]In 2006, [Wingstop]Andrew Charles, Cowen analyst wrote to his clients Dec. 13: “In 2015.”
Sweetgreen may be the first fast-casual chain of salad restaurants to go public. However, it is not likely that Sweetgreen will be the last. With millions raised from crowdfunding, a flurry other rivals, such as Chop’t and Just Salad, are waiting in the wings.
Charles stated that the Salad Chain is also the company that best connects two industry trends, transparent food sourcing as well as consumer-facing tech.
Jared Garber of Goldman Sachs initiated the stock with a price target of $48 and recommended it as a buy. Garber stated that the company was at the forefront in technological innovation and integration within the restaurant industry, even though its size is small. Sweetgreen makes more than half of its revenue from digital transactions. bought robotics company Spyce earlier this year.
Sweetgreen investors want to know if the company is able expand beyond its urban core into suburban areas before their rivals threaten its market share. Morgan Stanley analyst John Glass wrote to clients, that Sweetgreen’s inability to make a profit could cause concern. However, the vast majority of publicly traded restaurants remain profitable.
Sweetgreen has recovered from its pandemic lows and lost $86.9 millions in 2021. This was down from an initial loss of $100.2million on Sept. 26. In the same-store period, sales rose 21% compared to last year.
In 2022, there will be more exciting IPOs within the restaurant sector. P.F. Chang’s had reportedly been in discussions to become public. Panera Bread stated in November that it’s planning to return to the public markets.