Sweetgreen (NYSE:SG) Is In A Strong Position To Grow Its Business

Simply Wall St.12-20 20:00

Just because a business does not make any money, does not mean that the stock will go down. For example, Sweetgreen (NYSE:SG) shareholders have done very well over the last year, with the share price ...

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For example, Sweetgreen (NYSE:SG) shareholders have done very well over the last year, with the share price ...</p>\n\n<a href=\"https://finance.yahoo.com/news/sweetgreen-nyse-sg-strong-position-120041541.html\">Source Link</a>\n\n</div>\n\n\n</article>\n</div>\n</body>\n</html>\n","isBrief":false,"type":0,"news_type":1,"symbol":"NYSE","symbol_name":"纽交所","start_time":0,"source_url":"https://finance.yahoo.com/news/sweetgreen-nyse-sg-strong-position-120041541.html","article_id":"2492449951","we_media_id":null,"thumbnails":["https://s.yimg.com/uu/api/res/1.2/Lvd_lXQD0CnLIwypMB0Chg--~B/aD00MzI7dz0xMTk0O2FwcGlkPXl0YWNoeW9u/https://media.zenfs.com/en/simply_wall_st__316/5bcbcb810206bcc5d4f98bf0187f8a6c"],"rights":null,"url":"https://stock-news.laohu8.com/highlight/detail?id=2492449951","pubTimestamp":1734696041,"columns":[],"sourceInfo":{"source_id":"yahoofinance","name":"雅虎金融"},"weMediaInfo":null,"summary":"Just because a business does not make any money, does not mean that the stock will go down. For example, Sweetgreen  shareholders have done very well over the last year, with the share price soaring by 204%. But while the successes are well known, investors should not ignore the very many unprofitable companies that simply burn through all their cash and collapse.So notwithstanding the buoyant share price, we think it's well worth asking whether Sweetgreen's cash burn is too risky. In this article, we define cash burn as its annual  free cash flow, which is the amount of money a company spends each year to fund its growth. Let's start with an examination of the business' cash, relative to its cash burn.It may already be apparent to you that we're relatively comfortable with the way Sweetgreen is burning through its cash. In particular, we think its cash runway stands out as evidence that the company is well on top of its spending. And even though its revenue growth wasn't quite as impr","collect":0,"end_time":0,"defaultTopTitle":"yahoo.com","property":[],"viewcount":null,"language":"en","relate_stocks":{"NYSE":"纽交所","SG":"Sweetgreen, Inc.","BK4209":"餐馆"},"translate_title":"Sweetgreen（纽约证券交易所股票代码：SG）在发展业务方面处于有利地位","themeId":null,"isJumpTheme":false,"ttsUrl":null,"symbols_score_info":{"NYSE":1,"SG":1},"content_text":"Just because a business does not make any money, does not mean that the stock will go down. For example, Sweetgreen (NYSE:SG) shareholders have done very well over the last year, with the share price soaring by 204%. But while the successes are well known, investors should not ignore the very many unprofitable companies that simply burn through all their cash and collapse. \n So notwithstanding the buoyant share price, we think it's well worth asking whether Sweetgreen's cash burn is too risky. In this article, we define cash burn as its annual (negative) free cash flow, which is the amount of money a company spends each year to fund its growth. Let's start with an examination of the business' cash, relative to its cash burn. \n View our latest analysis for Sweetgreen \n How Long Is Sweetgreen's Cash Runway? \n A company's cash runway is calculated by dividing its cash hoard by its cash burn. As at September 2024, Sweetgreen had cash of US$235m and no debt. In the last year, its cash burn was US$33m. So it had a cash runway of about 7.0 years from September 2024. Notably, however, analysts think that Sweetgreen will break even (at a free cash flow level) before then. In that case, it may never reach the end of its cash runway. You can see how its cash balance has changed over time in the image below. \n\n\n\n  NYSE:SG Debt to Equity History December 20th 2024\n \n\nHow Well Is Sweetgreen Growing?\n Happily, Sweetgreen is travelling in the right direction when it comes to its cash burn, which is down 70% over the last year. And revenue is up 22% in that same period; also a good sign. It seems to be growing nicely. While the past is always worth studying, it is the future that matters most of all. For that reason, it makes a lot of sense to take a look at our analyst forecasts for the company. \n How Easily Can Sweetgreen Raise Cash? \n While Sweetgreen seems to be in a decent position, we reckon it is still worth thinking about how easily it could raise more cash, if that proved desirable. Companies can raise capital through either debt or equity. Many companies end up issuing new shares to fund future growth. We can compare a company's cash burn to its market capitalisation to get a sense for how many new shares a company would have to issue to fund one year's operations. \n Sweetgreen has a market capitalisation of US$3.9b and burnt through US$33m last year, which is 0.9% of the company's market value. That means it could easily issue a few shares to fund more growth, and might well be in a position to borrow cheaply. \n Is Sweetgreen's Cash Burn A Worry? \n It may already be apparent to you that we're relatively comfortable with the way Sweetgreen is burning through its cash. In particular, we think its cash runway stands out as evidence that the company is well on top of its spending. And even though its revenue growth wasn't quite as impressive, it was still a positive. There's no doubt that shareholders can take a lot of heart from the fact that analysts are forecasting it will reach breakeven before too long. Taking all the factors in this report into account, we're not at all worried about its cash burn, as the business appears well capitalized to spend as needs be. Its important for readers to be cognizant of the risks that can affect the company's operations, and we've picked out 3 warning signs for Sweetgreen that investors should know when investing in the stock. \n Of course, you might find a fantastic investment by looking elsewhere. So take a peek at this free list of companies with significant insider holdings, and this list of stocks growth stocks (according to analyst forecasts) \nHave feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.","kind":"highlight","is_publish_news":true,"is_publish_highlight":false,"is_publish_live":false,"is_publish_wemedia":null,"editions":null,"column":"","sentiment":"1","news_tag":"","news_rank":0,"symbols":[],"gpt_button":1},"commentList":[],"isCommentEnd":true,"newsSizeData":{"likeSize":0,"commentSize":0,"repostSize":0,"favoriteSize":0,"likeStatus":false,"favoriteStatus":false},"APP":{"userAgent":"Mozilla/5.0 AppleWebKit/537.36 (KHTML, like Gecko; compatible; ClaudeBot/1.0; +claudebot@anthropic.com)","isDev":false,"isTTM":true,"deviceId":"web-server-community-laohu8-v3","version":"4.29.3","shortVersion":"4.29.3","platform":"web","vendor":"web","appName":"ttm","isIOS":false,"isAndroid":false,"isTiger":false,"isTHS":false,"isWeiXin":false,"isWeiXinMini":false,"isWeiBo":false,"isQQ":false,"isBaiduSwan":false,"isBaiduBox":false,"isDingTalk":false,"isToutiao":false,"isOnePlus":false,"isHuaWei":false,"isXiaomi":false,"isXiaomiWebView":false,"isOppo":false,"isVivo":false,"isSamsung":false,"isMobile":false},"href":"/m/news/2492449951"}