There are only a bit of greater than 30 U.S. exchange-listed firms with market caps greater than $1 billion that greater than doubled in the primary half of this yr. It’s fair to say that the majority of them won’t repeat the feat through the ultimate six months of 2024. It does not imply that all of them won’t deliver an encore performance.
Cava (NYSE: CAVA), Hims & Hers Health (NYSE: HIMS), and Sweetgreen (NYSE: SG) are amongst handful of names which have already doubled this yr. They’ve a shot at doubling again before the tip of 2024. Let’s take a more in-depth look.
1. Cava Group: Up 116%
Investors are sometimes smart to avoid freshly minted IPOs, but Cava has proven to be a tasty exception to the rule. The fast-growing chain of Mediterranean fast-casual restaurants went public at $22 within the springtime of last yr. It nearly doubled to $42.98 by the tip of 2023. It has gone on to greater than double this yr, a four-bagger for many who got in on the IPO lower than 13 months ago.
Cava closed out its latest fiscal quarter with 323 locations, nevertheless it’s lower than a 3rd of the strategy to its goal of getting 1,000 locations open by 2032. The brand’s growing appeal and a few of its unique product offerings have also translated well to the upscale grocery level as a seller of consumer packaged goods.
Growth and top-line store-level performance have slowed since Cava’s first quarter as a public company when revenue soared 62% on the strength of brisk expansion and an 18.2% jump in comparable-store sales. Revenue in its latest report rose 30%, fueled largely by a 23% surge in its open locations. Comps rose a mere 2.3%, and a more in-depth look could prove problematic. The modest comps figure is the results of a 3.5% increase from menu price and product mix, weighed down by a 1.2% decline in guest traffic.
This is not as problematic because it seems. For starters, Cava’s scalability has scored it better-than-expected profitability in every quarter as a public company. Its adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) nearly doubled in its latest quarter.
Watching a hot chain undergo a slowdown in traffic might be scary, but Cava actually raised its guidance when it announced its first-quarter leads to late May. It was initially eyeing a 3% to five% increase for the complete 2024 fiscal yr. Now it’s eyeing a 4.5% to six.5% increase. Put one other way, business is predicted to choose up again at the shop level to provide the aggressive chain expansion more oomph.
2. Hims & Hers Health: Up 127%
The promise of telehealth is a win-win on paper. Using videoconferencing to attach someone requiring a medical consultation with a licensed or trained skilled is cheaper, faster, and more discreet than conventional in-office visitations. Nonetheless, the medium has generally did not deliver profitable and sustainable growth.
Hims & Hers Health might be the exception. Hims was founded seven years ago, initially leaning on telehealth to sell hair loss and erectile dysfunction treatments that require a medical prescription. It will go on to double its target market by launching Hers, offering contraception and flibanserin. It will eventually tackle mental health, and earlier this yr it became a source to secure the wildly popular GLP-1 weight reduction injections.
Growth has been stellar. Revenue gains have clocked in at 46% or higher for each quarter for the reason that company went public three years ago. It has finally broken out of the red, clocking in with back-to-back quarters of profitable results. There are regulatory risks here if there is a crackdown on telehealth prescriptions, nevertheless it could also be too late to place that genie back within the bottle.
3. Sweetgreen: Up 167%
Let’s close out with one other fast-growing restaurant chain. In a yr during which tech and crypto dominate the names of stocks that doubled, Sweetgreen resides as much as its name for its fortunate 2024 investors. The corporate’s fast-casual eateries specializing in premium salads and warm bowls are rocking, and the stock’s 167% year-to-date burst makes it one in every of 2024’s biggest consumer-facing gainers.
Unlike Cava, Sweetgreen was a dud after its initial IPO pop. It went public at $28 in 2021, briefly trading north of $50 before whittling its way all the way down to the high single digits by late last yr. The starting line matters here. Sweetgreen is growing roughly according to Cava nowadays. Revenue rose 26% in its latest quarter on a 5% uptick in comps. Nonetheless, it’s still not profitable.
The catalyst for continued growth here is analogous to what could drive Cava higher. These are high-end fast casual concepts that appeal to young and affluent professionals. The return to in-office work should proceed to drive weekday lunch traffic to each chains, and brand appeal should only proceed to grow because the yr plays out.
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Rick Munarriz has no position in any of the stocks mentioned. The Motley Idiot recommends Cava Group and Sweetgreen. The Motley Idiot has a disclosure policy.
3 Stocks That Can Double Again in 2024 was originally published by The Motley Idiot