Sweetgreen (SG) - ★★★ - Ranked #54 in Q2 2024 SMID Equity Rankings
Call option traders feasted on profits from Sweetgreen (SG) on Friday as the healthy fast-casual chain's stock soared over 40% after a blockbuster earnings report. The May 17 2024 $25 strike call options exploded 429% higher to $9.00 per contract at the peak, up from just $1.70 at the prior close.
The massive move in Sweetgreen's options came as the company's shares rallied as high as 45% in pre-market trading. Investors celebrated the chain's Q1 earnings beat driven by a 5% increase in same-store sales. Despite posting a wider net loss, Sweetgreen raised its full-year revenue guidance to $660-$675 million.
Analysts applauded the strong results, particularly highlighting Sweetgreen's nationwide launch of new steak plate dinner entrees this week after a successful test run in Boston. The steak plates could provide a sizeable sales boost by attracting customers for dinner beyond Sweetgreen's typical lunch crowd.
The call option frenzy demonstrates the leverage and upside available to options traders when an underlying stock makes an explosive move. With Sweetgreen shares up over 200% year-to-date, bullish options positioning ahead of earnings paid off handsomely for traders looking to capitalize on the healthy chain's sizzling momentum.
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