Investing in up-and-coming restaurant stocks can be lucrative. As a business opens new locations, acquires more customers, builds its brand reputation, and pushes up revenue and profits, the gains can be magnificent.
This is the recipe that the bulls are hoping Sweetgreen (SG 3.83%) can take advantage of. Is this restaurant stock a buy, sell, or hold in 2026?
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It's difficult to be optimistic about Sweetgreen
In recent memory, Chipotle is the most notable success story in the fast casual niche of the overall restaurant sector. The strategy emphasizes quality ingredients with quick service and reasonable prices, providing a more upscale experience than traditional fast food. Customers appreciate this offering.
Sweetgreen's focus is on healthy salads and bowls, aiming to differentiate itself in the crowded industry. That positioning makes sense, and it has supported the company getting to 281 stores (as of Dec. 28, 2025) from 119 five years before.
However, Sweetgreen's growth trajectory has hit a major roadblock. It's clear now that the more expensive menu items are exposed to macro trends. In fiscal 2025, revenue increased by just 0.4%, heavily influenced by same-store sales that fell 7.9%. Weak traffic was highlighted, something impacting the entire sector.
Sweetgreen also isn't a profitable enterprise. The net loss totaled $134 million in fiscal 2025, which was worse than the year before. That trend is understandable. Sweetgreen needs to achieve greater scale and a higher revenue base if it wants to leverage its fixed costs and support profitability. But this outcome is not guaranteed.
As part of its Sweet Growth Transformation Plan, management wants to boost the value perception of the brand. That will be critical to win sales, particularly in the current uncertain environment.
NYSE: SG
Key Data Points
Struggling to satisfy investor appetites
Sweetgreen shares have fallen precipitously. They have dropped 73% just over the past 12 months (as of March 5). The market has lost its appetite as growth is nonexistent.
There is one positive way to view the situation. The valuation is dirt cheap. Investors can scoop up shares at a price-to-sales (P/S) ratio of 1. Since its initial public offering in November 2021, the stock sold for an average P/S multiple of 4. Value investors might find this opportunity too hard to pass up.
It's enticing. Until the company can return to durable growth and an improving bottom line, though, I don't think the stock is investable. But because of how cheap it is, it might still make sense for existing shareholders who believe in a turnaround to hold.
