Which Is a Better Investment, Sweetgreen Inc or Wingstop Inc Stock? (2024)

Sifting through countless of stocks in the Restaurants & Bars industry can be tedious, and sometimes two stocks are just too similar to judge which is the better investment. If you’re on the fence about investing in Wingstop Inc or Sweetgreen Inc because you’re not sure how they measure up, it’s important to compare them on a few factors before making your decision.

Read on to learn how Wingstop Inc and Sweetgreen Inc compare based on key financial metrics to determine which better meets your investment needs.

Wingstop Inc. is a fast casual chicken wings-focused restaurant chain, with over 2,200 locations worldwide. The Company is in the business of franchising and operating Wingstop restaurants. The Company is primarily a franchisor, with approximately 98% of its restaurants owned and operated by independent franchisees. It offers classic wings, boneless wings, tenders, and chicken sandwiches, cooked to order and hand sauced-and-tossed in fans' choice of 11 bold, distinctive flavors. The Company also complements its wings, tenders, and chicken sandwiches with seasoned fries, hand-cut carrots, ranch, bleu cheese dips and celery. The Company offers various order options, including dine-in, carryout, delivery, individual, combo meals and family packs. The Company operates approximately a total of 2,165 restaurants in 45 states and 11 countries and United States territories.

Sweetgreen, Inc. is a restaurant company. The Company, along with its subsidiaries, is engaged in developing a restaurant and lifestyle brand that serves healthy food at scale. It owns and operates approximately 221 restaurants in 18 states and Washington, D.C. It offers signature salads, warm bowls, and plates that are complemented by a seasonal menu that changes five times per year. In Addition, it offers diversified menu to provide customers with a variety of options, including broths, soups, desserts and beverages. It is also engaged in offering consumer packaged goods, such as dressing, sauces, or packaged produce. Its menu offering includes Core menu and Seasonal menu. The Core menu consists of Harvest Bowl, Kale Caesar, Shroomami, Guacamole Greens, Buffalo Chicken Bowl, Fish Taco, Crisp Rice Bowl, Chicken Pesto Parm, Super Green Goddess, Garden Cobb and Hot Honey Chicken. The Seasonal menu consists of Crispy Chicken, Elote Bowl, and Summer Fruits & Burrata.

As of March 13, 2024, Wingstop Inc had a $10.3 billion market capitalization, compared to the Restaurants & Bars median of $919.0 million. Wingstop Inc’s stock is NA in 2024, NA in the previous five trading days and up 107.86% in the past year.

Currently, Wingstop Inc’s price-earnings ratio is 146.4. Wingstop Inc’s trailing 12-month revenue is $460.1 million with a 15.3% net profit margin. Year-over-year quarterly sales growth most recently was 21.2%. Analysts expect adjusted earnings to reach $2.992 per share for the current fiscal year. Wingstop Inc currently has a 0.3% dividend yield.

Currently, Sweetgreen Inc does not have a price-earnings ratio. Sweetgreen Inc’s trailing 12-month revenue is $584.0 million with a -19.4% net profit margin. Year-over-year quarterly sales growth most recently was 29.0%. Analysts expect adjusted earnings to reach $-0.530 per share for the current fiscal year. Sweetgreen Inc does not currently pay a dividend.

Stock evaluation requires access to huge amounts of data and the knowledge and time to sift through it all, make sense of financial ratios, read income statements and analyze recent stock movements. AAII created A+ Investor, a robust data suite that condenses data research in an actionable and customizable way suitable for investors of all knowledge levels, to help investors streamline and work through such data.

AAII’s proprietary stock grades come with A+ Investor. These offer intuitive A‐F grades for each of five key investing factors: value, growth, momentum, earnings estimate revisions and quality. Here, we’ll take a closer look at Wingstop Inc and Sweetgreen Inc’s stock grades to see how they measure up against one another.

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Successful stock investing involves buying low and selling high, so stock valuation is an important consideration for stock selection.

Buying stocks that are going to go up typically means buying stocks that are undervalued in the first place, although momentum investors may argue that point.

AAII’s A+ Investor Value Grade derives from a stock’s value score. The Value Score is the percentile rank of the average of the percentile ranks of the price-to-sales ratio, price-earnings ratio, enterprise-value-to-EBITDA (EV/EBITDA) ratio, shareholder yield, price-to-book-value ratio and price-to-free-cash-flow ratio. The score is variable, meaning it can consider all six ratios or, should any of the six ratios not be valid, the remaining ratios that are valid. To be assigned a Value Score, stocks must have a valid (non-null) ratio and corresponding ranking for at least two of the six valuation ratios.

Stocks with a Value Score from 81 to 100 are considered deep value, those with a score between 61 and 80 are a good value and so on.

Wingstop Inc has a Value Score of 5, which is Ultra Expensive. Sweetgreen Inc has a Value Score of 14, which is Ultra Expensive.

Neither Wingstop Inc or Sweetgreen Inc has a high enough value grade to be considered a “winner.” Investors who are considering these companies should do additional due diligence and research to see if either could be a good addition to their portfolio. It’s important to look at a wide range of financial metrics in order to determine if Wingstop Inc or Sweetgreen Inc is the better investment when it comes to value.

Momentum grades help to uncover stocks experiencing anomalously high rates of return; research finds that stocks with high relative levels of momentum tend to outperform, whereas those with low levels of momentum tend to continue underperforming. Momentum is based on the price change of a stock over a specified period relative to all other stocks.

Typically, AAII looks at the weighted relative strength over the trailing four quarters. The weighted four-quarter relative strength rank is the relative price change for each of the past four quarters. The most recent quarterly price change is given a weight of 40% and each of the three previous quarters are given a weighting of 20%.

Wingstop Inc has a Momentum Score of 91, which is Very Strong. Sweetgreen Inc has a Momentum Score of 96, which is Very Strong.

Earnings estimate revisions scores consider the magnitude of a company’s earnings surprise in its last two reported fiscal quarters. Often, positive surprises beget further positive surprises‐or at least continued sales growth (the exact opposite is generally true, too).

Estimate revisions offer an indication of what analysts are thinking about the short-term prospects of a firm. Estimate revisions are based on the statistical significance of a firm’s last two quarterly earnings surprises and the percentage change in its consensus estimate for the current fiscal year over the past month and past three months.

Wingstop Inc has a Earnings Estimate Score of 70, which is Positive. Sweetgreen Inc has a Earnings Estimate Score of 46, which is Neutral.

Growth investing builds on the idea that stocks of companies exhibiting strong, consistent and prolonged growth outperform those of slower-growth companies. AAII measures growth through consistency of annual sales growth, five-year sales growth rankings adjusted for extreme levels, and consistency of positive annual cash from operations.

AAII’s A+ Investor Quality Grade comes from the ranking of key metrics. Specifically, the quality grade is the percentile rank of the composite of return on assets (ROA), return on invested capital (ROIC), gross profit relative to assets, buyback yield, change in total liabilities to assets, accruals, Z double prime bankruptcy risk (Z) score and F-Score.

These 2 key factors, when combined with the above, provide a holistic view into a particular stock. Further, by joining A+ Investor you can see whether Wingstop Inc and Sweetgreen Inc pass any of our 60+ stock screens that have outperformed the market since their creation.

Overall, Wingstop Inc stock has a Value Score of 5, Momentum Score of 91 and Estimate Revisions Score of 70.

Sweetgreen Inc stock has a Value Score of 14, Momentum Score of 96 and Estimate Revisions Score of 46.

Comparing Wingstop Inc and Sweetgreen Inc’s grades, scores and metrics can act as a solid basis to determine whether they may be a good investment or not. You’ll also want to look at your portfolio’s asset allocation as well as your risk tolerance and financial goals to see if either of these stocks would make a good fit for you. AAII can help you figure out which investments align with your individual needs and preferences.

Investors are encouraged to do their own due diligence and research. In this way, individuals can effectively become managers of their own assets‐without having to rely on others for financial independence. You can count on AAII for timeless articles on financial planning and stock-picking, unbiased research and actionable analysis.

A+ Investor adds to our qualitative teaching with a powerful data suite to help you whittle down investment choices to find stocks, exchange-traded funds (ETFs) or mutual funds that meet your needs.