There are just over 30 US publicly traded companies with a market cap of over $1 billion, which more than doubled in the first half of this year. It’s fair to say that most of them won’t repeat that feat in the final six months of 2024. That doesn’t mean all none of them will give a concession.
Cava (NYSE: CAVA), Him & Her Health (NYSE: HIJS)And Sweet green (NYSE: SG) are among the handful of names that have already doubled this year. They have a chance to double again before the end of 2024. Let’s take a closer look.
1. Cava Group: 116% up
Investors are often smart to stay away from recently released IPOs, but Cava has proven to be a tasty exception to the rule. The fast-growing chain of Mediterranean fast-casual restaurants went public last spring at $22. By the end of 2023, it had nearly doubled in value to $42.98. This year, it has more than doubled, or quadrupled, for those who bought into the IPO less than 13 months ago.
Cava ended its last fiscal quarter with 323 locations, but it’s less than a third of the way toward its goal of opening 1,000 locations by 2032. The brand’s growing appeal and some of its unique product offerings have also translated well to the luxury grocery level as a consumer goods retailer.
Growth and top-line performance at the stores have slowed since Cava’s first quarter as a public company, when sales rose 62% thanks to robust expansion and an 18.2% jump in comparable-store sales. Sales in the last report were up 30%, largely fueled by a 23% increase in open locations. Comparable sales rose just 2.3%, and a closer look could prove problematic. The modest comparables are the result of a 3.5% increase in menu price and product mix, weighed down by a 1.2% decline in guest traffic.
This isn’t as problematic as it might seem. For starters, Cava’s scalability has helped it deliver better-than-expected profitability in every quarter it’s been a public company. Adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) nearly doubled in the most recent quarter.
It can be scary to watch a hot chain weather a traffic slowdown, but Cava raised its forecast when it reported first-quarter results in late May. It had initially eyed a 3% to 5% increase for the full fiscal year 2024. Now it’s targeting a 4.5% to 6.5% increase. In other words, it expects business to rebound at the store level to fuel the chain’s aggressive expansion.
2. Hims & Hers Health: Up 127%
The promise of telehealth is a win-win on paper. Using videoconferencing to connect someone in need of a medical consultation with a licensed or trained professional is cheaper, faster, and more discreet than traditional in-office visits. However, the medium has generally failed to deliver profitable and sustainable growth.
Hims & Hers Health might be the exception. Hims, founded seven years ago, initially leaned on telehealth to sell prescription treatments for hair loss and erectile dysfunction. It would double its audience by launching Hers, which offers birth control and flibanserin. It would eventually tackle mental health and earlier this year became a source for the wildly popular GLP-1 weight-loss injections.
The growth has been great. Revenue growth has been 46% or higher for every quarter since the company went public three years ago. It has finally broken out of the red and posted two consecutive quarters of profitability. There are regulatory risks here if telehealth regulations are cracked down on, but it may be too late to put the genie back in the bottle.
3. Sweetgreen: 167% up
Let’s close with another fast-growing restaurant chain. In a year where tech and crypto dominated the names of stocks that doubled, Sweetgreen is living up to its name for its lucky investors in 2024. The company’s fast-casual eateries specializing in premium salads and hot bowls are rocking, and the stock’s 167% year-to-date surge makes it one of the biggest consumer-facing gainers of 2024.
Unlike Cava, Sweetgreen was a bust after its initial IPO pop. It went public in 2021 at $28, briefly trading above $50 before dropping to the high single digits late last year. The starting line is important here. Sweetgreen is growing roughly in line with Cava these days. Revenue rose 26% in the most recent quarter on a 5% increase in comps. However, it’s still not profitable.
The catalyst for continued growth here is similar to what could propel Cava higher. These are high-end fast casual concepts that appeal to young and affluent professionals. The return to office work should continue to drive weekday lunch traffic to both chains, and the brand’s appeal should only continue to grow as the year progresses.
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Rick Munarriz has no position in any of the stocks mentioned. The Motley Fool recommends Cava Group and Sweetgreen. The Motley Fool has a disclosure policy.
3 Stocks That Could Double Again in Value in 2024 was originally published by The Motley Fool
