Wingstop Inc. (NASDAQ: WING)

Sector: Consumer Cyclical Industry: Restaurants CIK: 0001636222
Market Cap 7.13 Bn
P/B -10.14
P/E 40.90
P/S 10.44
ROIC (Qtr) 21.78
Div Yield % 0.56
Rev 1y % (Qtr) 8.15
Total Debt (Qtr) 1.27 Bn
Debt/Equity (Qtr) -1.81

About

Wingstop Inc., a prominent player in the fast-casual dining industry, operates under the ticker symbol WING. With over 2,200 locations worldwide, it holds the position of the largest fast-casual chicken wings-focused restaurant chain globally. The company's mission is to deliver unparalleled flavor experiences to the world through its offering of classic wings, boneless wings, tenders, and chicken sandwiches, all cooked to order and hand-sauced-and-tossed in 11 bold, distinctive flavors. Wingstop's primary business activities revolve around the...

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Price action

Investment thesis

Bull case

  • Healthy cash reserves of 263.63M provide 89.22x coverage of short-term debt 2.96M, demonstrating strong liquidity position and minimal refinancing risk.
  • Tangible assets of 609.12M provide exceptional 13.04x coverage of deferred revenue 46.72M, showing strong service capability backing.
  • Robust free cash flow of 83.87M exceeds capital expenditure of 19.62M by 4.27x, indicating strong organic growth funding capability.
  • Operating cash flow of 103.49M provides solid 1.31x coverage of current liabilities 78.98M, showing strong operational health.
  • Operating cash flow of 103.49M fully covers other non-current liabilities 31.27M by 3.31x, showing strong long-term stability.

Bear case

  • Operating cash flow of 103.49M provides thin coverage of dividend payments of (31.91M) with a -3.24 ratio, suggesting potential dividend sustainability issues if operational performance deteriorates.
  • Cash reserves of 263.63M provide limited coverage of acquisition spending of (9.22M), which is -28.59x, suggesting aggressive expansion might strain liquidity if market conditions deteriorate.
  • The company's operating cash flow of 103.49M shows concerning coverage of stock compensation expenses of 23.65M, with a 4.38 ratio indicating potential earnings quality issues.
  • Operating cash flow of 103.49M provides minimal 1.67x coverage of tax expenses of 62.04M, suggesting potential tax planning inefficiencies or unsustainable tax positions.
  • Retained earnings of (709.68M) provide limited buffer against comprehensive income items of 5.72M, which is -124.05x, indicating elevated exposure to market risks.

Peer comparison

Companies in the Restaurants
S.No. Ticker Company Market Cap P/E P/S Total Debt (Qtr)
1 MCD Mcdonalds Corp 222.05 Bn 26.39 8.45 55.82 Bn
2 SBUX Starbucks Corp 95.51 Bn 51.45 2.57 26.61 Bn
3 CMG Chipotle Mexican Grill Inc 50.94 Bn 33.15 4.32 4.98 Bn
4 YUM Yum Brands Inc 43.17 Bn 29.83 5.36 11.55 Bn
5 QSR Restaurant Brands International Inc. 22.43 Bn 24.33 2.42 15.64 Bn
6 DRI Darden Restaurants Inc 21.91 Bn 19.91 1.77 6.16 Bn
7 YUMC Yum China Holdings, Inc. 18.12 Bn 20.05 1.57 1.84 Bn
8 DPZ Dominos Pizza Inc 14.57 Bn 24.72 3.01 5.05 Bn

Industry comparisons

Current Valuation Value Ind Avg Percentile
EV to Assets EV to Assets 11.29 2.05
EV to Cash from Ops. EV/CFO 78.67 16.57
EV to Debt EV to Debt 6.41 4.75
EV to EBIT EV/EBIT 30.23 3.45
EV to EBITDA EV/EBITDA 40.95 9.76
EV to Free Cash Flow [EV/FCF] EV/FCF 97.08 29.06
EV to Market Cap EV to Market Cap 1.14 6.55
EV to Revenue EV/Rev 11.92 2.40
Price to Book Value [P/B] P/B -10.14 -1.40
Price to Earnings [P/E] P/E 40.90 13.35
Dividend Metrics Value Ind Avg Percentile
Dividend Coverage Ratio Div Coverage (Qtr) 5.46 -9.56
Dividend Payout Ratio % Div Payout % (Qtr) 18.00 18.72
Dividend per Basic Share Div per Share (Qtr) 1.11 0.84
FCF Dividend Payout Ratio % FCF Div Payout % (Qtr) 36.93 30.41
Interest Coverage Int. cover (Qtr) 8.16 -86.85
Growth Metrics Value Ind Avg Percentile
Capex Growth (1y) % Capex 1y % (Qtr) 58.94 -24.56
Cash and Equivalents Growth (1y) % Cash & Equiv 1y % (Qtr) 176.34 35.50
Dividend Growth (1y) % Div 1y % (Qtr) 19.35 -0.72
EBIAT Growth (1y) % EBIAT 1y % (Qtr) 71.97 -564.81
EBITDA Growth (1y) % EBITDA 1y % (Qtr) 16.38 25.78
EBIT Growth (1y) % EBIT 1y % (Qtr) 73.48 -507.68
EBT Growth (1y) % EBT 1y % (Qtr) 74.44 -41.98
EPS Growth (1y) % EPS 1y % (Qtr) 78.78 -126.51
FCF Growth (1y) % FCF 1y % (Qtr) -40.06 5,724.78
Gross Profit Growth (1y) % Gross Profit 1y % (Qtr) 16.90 23.70
Liquidity Ratios Value Ind Avg Percentile
Asset Utilization Ratio Asset Util Ratio (Qtr) 0.95 0.99
Cash Payout Ratio Cash Payout (Qtr) 0.26 0.07
Cash Ratio Cash Ratio (Qtr) 3.34 0.78
Current Ratio Curr Ratio (Qtr) 4.05 1.47
Debt to Equity Ratio Debt/Equity (Qtr) -1.81 0.05
Interest Cover Ratio Int Coverage (Qtr) 8.16 -86.85
Times Interest Earned Times Interest Earned (Qtr) 8.16 -86.85
Profitability Value Ind Avg Percentile
EBITDA Margin % EBITDA Margin % (Qtr) 43.00 7.71
EBIT Margin % EBIT Margin % (Qtr) 39.43 -2.27
EBT Margin % EBT Margin % (Qtr) 34.60 -1.97
Gross Margin % Gross Margin % (Qtr) 86.10 34.04
Net Profit Margin % Net Margin % (Qtr) 25.50 -3.69