Wingstop (WING) AI Stock Analysis

• Market Cap: $7.45B
• Dividend Yield: 0.39%
• Average Volume (3M): 987.67K
• Price to Earnings (P/E): 45.2
• Beta (1Y): 1.20
• Revenue Growth: 30.98%
• EPS Growth: 112.65%
• Country: US
• Employees: 325
• Sector: Consumer Cyclical
• Sector Strength: 61
• Industry: Restaurants
• EPS (TTM): 0.99
• Shares Outstanding: 27,902,887
• 10 Day Avg. Volume: 1,075,522
• 30 Day Avg. Volume: 987,672
• PEG Ratio: N/A
• Price to Book (P/B): N/A
• Price to Sales (P/S): 0.00
• Price to Cash Flow (P/CF): 0.00
• P/FCF Ratio: 0.00
• Enterprise Value/Market Cap: 0.99
• Enterprise Value/Revenue: N/A
• Enterprise Value/Gross Profit: 24.44
• Enterprise Value/Ebitda: N/A
• 1Y Price Target: $314.62
• Price Target Upside: 17.69% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 23

Wingstop's strong revenue growth and digital transformation drive positive sentiment, but high financial leverage and macroeconomic challenges pose risks. The stock's high valuation relative to earnings suggests caution. Overall, Wingstop presents a balanced outlook with potential for growth, albeit with financial and market risks.

Positive Factors

Attractive Valuation

The stock is considered oversold, with its valuation overly discounting higher unit and EBITDA growth compared to peers.

Customer Satisfaction

The Wingstop Smart Kitchen is shrinking quoted ticket times to 10 minutes during regular demand periods, leading to higher product quality and higher customer satisfaction.

Expansion Plans

Wingstop raised its unit growth outlook for the year to 16%-17%, indicating strong future expansion plans.

Negative Factors

Profit Margins

Higher costs of goods sold and labor expenses slightly impacted the company's profit margins.

Sales Guidance

WING lowered its same-store sales guidance, indicating a more cautious outlook for the near term.

Sales Performance

Domestic systemwide same-store sales fell short of expectations, affected by a consumer pullback.

Wingstop Business Overview & Revenue Model

Company Description

Wingstop Inc. is a leading restaurant chain specializing in cooked-to-order chicken wings. Founded in 1994 and headquartered in Addison, Texas, Wingstop has grown to become a prominent player in the fast-casual dining sector. The company is renowned for its variety of flavors and sauces, offering a unique dining experience focused on quality and flavor. Wingstop operates a mix of company-owned and franchised locations, with a significant presence in both domestic and international markets.

How the Company Makes Money

Wingstop generates revenue primarily through its franchising model. The company earns money from franchise fees, royalty fees, and advertising fees from its franchisees. Franchisees pay an initial franchise fee to open a location and ongoing royalty fees, which are typically a percentage of their sales. Wingstop also benefits from company-owned restaurant sales, although these make up a smaller portion of the overall revenue compared to franchise operations. Additionally, Wingstop's revenue is augmented by its partnerships with beverage and food suppliers, which can provide incentives and rebates based on sales volumes. The company's strategic expansion into international markets further contributes to its revenue growth, leveraging its brand and operational model to capture new customer bases.

Wingstop Financial Statement Overview

Summary

Wingstop exhibits strong revenue growth and efficient cash flow management, indicating operational success. However, negative stockholders' equity and high leverage present potential financial risks, necessitating a focus on profitability and debt reduction.

Income Statement

Wingstop has shown impressive revenue growth over the years, with a notable increase in total revenue from the previous periods. The company maintains strong profitability, demonstrated by a high gross profit margin and a solid net profit margin. The EBIT and EBITDA margins indicate efficient operational management. However, the slight decrease in EBIT compared to the prior annual report suggests potential pressure on operating efficiency.

Balance Sheet

The balance sheet reveals a significant concern with negative stockholders' equity, indicating potential financial instability. The high debt-to-equity ratio suggests over-leverage, which could pose risks in a volatile market. Nonetheless, the company has maintained a solid cash position with cash and short-term investments exceeding total debt. Equity ratio shows negative equity, indicating liabilities exceed assets, which needs careful monitoring.

Cash Flow

Wingstop demonstrates robust cash flow management with consistent operating cash flow generation and positive free cash flow. The company has managed to convert a significant portion of its net income into free cash flow, reflecting efficient cash management. However, the free cash flow growth rate has slowed, indicating potential challenges in further cash flow expansion.

Breakdown
Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement		Total Revenue
625.81M	460.06M	357.52M	282.50M	248.81M
	Gross Profit
300.87M	222.83M	170.12M	141.10M	130.80M
	EBIT
165.62M	112.59M	91.93M	73.76M	57.39M
	EBITDA
187.97M	125.78M	101.44M	81.83M	51.24M
	Net Income Common Stockholders
108.72M	70.17M	52.95M	42.66M	23.31M
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
315.91M	90.22M	184.50M	48.58M	40.86M
	Total Assets
716.25M	377.82M	424.19M	249.20M	211.56M
	Total Debt
1.27B	714.71M	714.15M	469.39M	470.53M
	Net Debt
949.52M	624.49M	529.65M	420.81M	429.68M
	Total Liabilities
1.39B	835.19M	815.05M	558.73M	552.88M
	Stockholders Equity
-675.59M	-457.37M	-390.86M	-309.52M	-341.31M
Cash Flow		Free Cash Flow
105.68M	80.77M	52.30M	20.86M	59.48M
	Operating Cash Flow
157.61M	121.60M	76.24M	48.88M	65.53M
	Investing Cash Flow
-62.48M	-52.15M	-28.68M	-29.85M	-7.99M
	Financing Cash Flow
144.76M	-155.49M	103.25M	-23.39M	-19.45M

Wingstop Technical Analysis

• Technical Analysis Sentiment: Neutral
• Last Price: 267.34
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Negative
• MACD: Negative
• RSI: Neutral
• STOCH: Negative

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For WING, the sentiment is Neutral. The current price of 267.34 is above the 20-day moving average (MA) of 240.63, above the 50-day MA of 230.76, and below the 200-day MA of 312.78, indicating a neutral trend. The MACD of 11.42 indicates Negative momentum. The RSI at 62.61 is Neutral, neither overbought nor oversold. The STOCH value of 89.15 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Neutral sentiment for WING.

Wingstop Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
CAVA	82 Outperform	$10.79B	84.81	20.58%	―	32.25%	873.48%
CAKE	73 Outperform	$2.45B	15.82	46.60%	2.15%	4.42%	48.23%
WING	70 Outperform	$7.45B	45.16	-16.09%	0.39%	30.98%	112.65%
SHAK	68 Neutral	$4.21B	343.47	2.70%	―	14.07%	-47.47%
WEN	66 Neutral	$2.28B	13.36	90.40%	8.33%	2.18%	-5.15%
Sector *	61 Neutral	$6.69B	11.69	3.01%	3.94%	2.60%	-21.51%
JACK	50 Neutral	$497.48M	―	4.15%	6.54%	-6.02%	-136.86%

Wingstop Corporate Events

Wingstop Appoints Thomas R. Greco to Board

Wingstop Inc. has expanded its Board of Directors from nine to ten members, appointing Thomas R. Greco as a new independent Class I director. Greco’s extensive experience, including leadership roles at Advance Auto Parts and PepsiCo, is expected to strengthen Wingstop’s board, potentially impacting its strategic direction and governance.