Sweetgreen Plunges 11.93%—What's Fueling the Fast-Food Frenzy?

Summary
• Sweetgreen (SG) tumbles 11.93% to $14.32, its lowest since early 2025
• Options activity surges with $407K in bullish bets on $12–$20 price window
• Analysts project $15–$22 price targets amid mixed sector sentiment

Sweetgreen’s intraday plunge of 11.93% has ignited a frenzy of options trading, with smart money betting on a $12–$20 range for the next quarter. The stock’s sharp decline from $15.61 to $14.31, coupled with a 3.78% turnover rate, signals heightened volatility. Analysts remain divided, with targets spanning $15 to $22, while sector leader McDonald’s (MCD) struggles with a -0.78% move.

Options Whales and Analyst Divergence Spark Selling Pressure
The 11.93% drop in Sweetgreen’s stock is driven by a confluence of factors: a $407K surge in bullish options trading on $12–$20 strikes, analysts’ mixed price targets ($15–$22), and broader sector weakness. The options data reveals heavy short-term positioning on $14–$15 puts, with implied volatility spiking to 117%–151% on August 8 expirations. Meanwhile, analysts at TD Securities downgraded to Hold at $15, while B of A Securities maintained a Buy at $22, reflecting divergent views on the company’s near-term recovery potential.

Restaurants Sector Sinks with MCD’s -0.78% Drag
The Restaurants sector is underperforming, led by McDonald’s -0.78% decline. Sweetgreen’s 11.93% drop far outpaces the sector’s move, suggesting stock-specific pressures dominate. While sector-wide challenges like shifting consumer spending patterns may play a role, Sweetgreen’s options-driven volatility and analyst divergence point to idiosyncratic factors.

Bullish Options and ETFs in the Crosshairs: Navigating the $12–$20 Window
• 200-day MA: $26.08 (well below current price)
• RSI: 63.17 (neutral, no overbought/oversold signal)
• MACD: 0.23 (bullish divergence)
• Bollinger Bands: $12.21–$15.67 (current price near lower band)

The technicals suggest a potential rebound from the lower Bollinger band at $12.21, with the 30D MA at $13.56 offering near-term support. Options with high leverage and implied volatility are key. Two top picks from the chain:

• SG20250808P14: Put option with 284.62% price change, 28.46% leverage, 69.61% IV, and 0.25 gamma. This contract thrives on a 5% downside move, yielding a $0.72 profit (from $14.32 to $13.60).
• SG20250808P14.5: Put option with 66.67% price change, 11.38% leverage, 117.01% IV, and 0.11 gamma. A 5% drop would generate $0.35 profit. Both contracts benefit from high gamma and moderate delta, amplifying gains in a bearish scenario.

Aggressive bulls may consider SG20250808C14 into a bounce above $14.50.

Backtest Sweetgreen Stock Performance
The backtest of SG's performance after a -11% intraday plunge shows favorable results, with win rates and returns indicating a positive trend. Here's a detailed analysis:1. Frequency and Win Rates: The event occurred 635 times, with a 3-day win rate of 49.45%, a 10-day win rate of 53.39%, and a 30-day win rate of 54.02%. This suggests that following the intraday plunge, SG had a higher probability of positive returns in the short to medium term.2. Returns: The average 3-day return was 0.73%, the 10-day return was 1.91%, and the 30-day return was 5.14%. These returns indicate that while the immediate response to the plunge was positive, the longer-term returns were more robust, with the maximum return of 10.88% occurring on day 59 after the plunge.In conclusion, while the initial reaction to the -11% intraday plunge was positive, with SG experiencing a brief increase, the longer-term performance was even more impressive, with returns consistently increasing over the 3 days, 10 days, and 30 days following the event. This suggests that investors may find opportunities in SG following significant market downturns, although the returns would likely vary in magnitude and timing.

Bullish Options and $13.56 Support: What to Watch Now
Sweetgreen’s 11.93% drop has created a high-volatility setup, with options whales targeting a $12–$20 range. The 30D MA at $13.56 and Bollinger lower band at $12.21 are critical levels to monitor. If the stock breaks below $13.56, the SG20250808P14 put offers strong short-side potential. Sector leader McDonald’s (-0.78%) underscores broader industry headwinds, but Sweetgreen’s options-driven action suggests a rebound could be near. Watch for $13.56 support or a breakout above $15.61 to confirm direction.