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Wingstop Inc WING

Morningstar Rating
$334.05 +23.73 (7.65%)
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Company Report

Wingstop's Unparalleled Unit Economics Provide Viable Route to Long-Term Double-Digit Sales Growth

While we don't quite foresee Wingstop achieving management's target of becoming a top-10 restaurant brand in the upcoming decade, we do see a meaningful development runway for the chicken chain, with our estimates calling for midteens systemwide sales growth over that period. Our forecasts are underpinned by best-in-class unit economics and a sizable development pipeline, validating management's target for more than 10% annual unit growth over the medium to long term. Operationally, we believe that management's strategy is cogent, with priorities falling into three key buckets: improving unit economics, driving brand awareness, and expanding into international markets.

Price vs Fair Value

WING is trading at a 140% premium.
Price
$334.05
Fair Value
$599.00
Uncertainty
High
1-Star Price
$364.77
5-Star Price
$38.40
Economic Moat
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Capital Allocation
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Bulls Say, Bears Say

Bulls

Wingstop's early success in the U.K. could augur well for a further thrust into large continental Europe markets.

Bears

Persistent wage inflation figures will pressure restaurant operators through the balance of 2023, limiting near-term margin recapture.

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News

Trading Information

Previous Close Price
$310.32
Day Range
$317.24343.29
52-Week Range
$150.08343.29
Bid/Ask
$307.36 / $360.00
Market Cap
$9.80 Bil
Volume/Avg
1.1 Mil / 426,778

Key Statistics

Price/Earnings (Normalized)
125.44
Price/Sales
21.07
Dividend Yield (Trailing)
0.25%
Dividend Yield (Forward)
0.26%
Total Yield
1.53%

Company Profile

Founded in 1994 in Garland, Texas, Wingstop is a restaurant operator specializing in indulgent bone-in and boneless chicken wings, chicken tenders, fries, and, recently, chicken sandwiches. The firm’s footprint has grown quickly since its inception, reaching north of 2,200 global stores at the end of 2023, rendering Wingstop the 31st-largest restaurant brand in the U.S. by system sales, according to Euromonitor data. With a 98% franchised model, Wingstop generates the lion share of its revenue from franchise royalties and advertising fees, with the remainder derived from a small footprint of company-owned stores.
Sector
Consumer Cyclical
Industry
Restaurants
Stock Style Box
Small Growth
Total Number of Employees
1,225

Competitors

Valuation

Metric
WING
QSR
YUM
Price/Earnings (Normalized)
125.4423.9625.78
Price/Book Value
8.52
Price/Sales
21.074.995.40
Price/Cash Flow
99.7322.4422.55
Price/Earnings
WING
QSR
YUM

Financial Strength

Metric
WING
QSR
YUM
Quick Ratio
1.450.880.99
Current Ratio
2.031.011.26
Interest Coverage
6.173.374.54
Quick Ratio
WING
QSR
YUM

Profitability

Metric
WING
QSR
YUM
Return on Assets (Normalized)
18.02%6.44%24.79%
Return on Equity (Normalized)
54.01%
Return on Invested Capital (Normalized)
29.25%9.94%55.35%
Return on Assets
WING
QSR
YUM
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