Report by New Constructs
Healthy product but unhealthy IPO - the stock is likely worth $0 given the company’s limited differentiation and the intense competition from other new entrants and established restaurants. Local sourcing model is expensive / risky; sees no path to profitability. Despite this, SG is priced to grow faster than Chipotle achieved in its first 10 years after going public.
In 2021, 36 out of New Constructs’ 41 Danger Zone stock picks outperformed as shorts with the top 5 outperforming the S&P 500 by an impressive 63% on average.