Should the Sweetgreen initial public offering (IPO) go according to plan, the fast-casual salad chain is looking at a roughly $2.7 billion valuation ahead of Thursday’s opening. Targeting an initial share price between $23 and $25, the health-conscious brand has high hopes for SG stock amid a flurry of competitive IPOs this season.
The “purpose-driven brand,” has experienced a fair amount of Covid-related turbulence over the past couple of years, but it has reason to suspect clear skies going forward. In its S-1 registration statement, Sweetgreen reported revenue totaling $243 million through Sept. 26 of this year, up from $161 million in 2020.
The restaurant chain is considered a unicorn for rapid growth food brands, growing from $42 million to $274 million between 2014 and 2019. There are currently 140 Sweetgreen locations spread across the United States, with more than 5,000 employees.
With that said, the company is still reporting yearly net losses, despite misleading PR statements.
Sweetgreen IPO: Does the Company See Green in its Future?
In a 2018 interview, Sweetgreen co-founder Jonathan Neman described a future for the brand much more elaborate than the salad-slinger of today. “We see this as building the food platform,” he told Vox.
“A restaurant creates content, so our salads are our hits. If you just have your restaurant itself, you own your platform, you go direct to consumer. … In the media world, you had networks and distributors that took the content and distributed it. In our world, you now have these platforms, these Uber Eats of the world.”
In the same interview, Neman responded affirmatively to the question of “Is Sweetgreen profitable?” From its IPO disclosure documents, this is definitively not the case. From 2014 to 2021, the farm-to-table concept has only reported net losses, usually in the tens of millions.
Now, it’s no new phenomenon for high-growth companies to report losses, even after their IPO. For example, Uber has been around forever and is only just now expecting a profitable quarter. The question is, which narrative will reign supreme come Thursday morning? The high-growth, fast-casual revolutionary is hoping past losses won’t infringe on otherwise optimistic outlooks for the “green” machine.
The Sweetgreen IPO is set for Thursday morning on the New York Stock Exchange under the “SG” ticker. Investors will have to wait and see how promising this company’s stock is once it hits the market.
On the date of publication, Shrey Dua did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.