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1. Company Snapshot

1.a. Company Description

The Wendy's Company, together with its subsidiaries, operates as a quick-service restaurant company.It operates through three segments: Wendy's U.S., Wendy's International, and Global Real Estate & Development.The company is involved in operating, developing, and franchising a system of quick-service restaurants specializing in hamburger sandwiches.


As of January 2, 2022, it operated approximately 403 company-operated restaurants; 5,535 franchised restaurants in the United States; and 1,006 franchised restaurants internationally.The company also owns and leases real estate properties.It owns 485 and leases 1,235 properties, which are leased or subleased to franchisees.


The company was formerly known as Wendy's/Arby's Group, Inc.and changed its name to The Wendy's Company in July 2011.The Wendy's Company was founded in 1969 and is headquartered in Dublin, Ohio.

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1.b. Last Insights on WEN

The Wendy's Company's recent performance was negatively impacted by weak U.S. traffic, falling sales estimates, and margin pressure due to inflation and store optimization. The company's Q4 2025 earnings revealed a double beat, but shareholders lost confidence, pushing the stock to its 52-week low. A clutch of analysts reduced their price targets following the earnings report. The company plans to close 5-6% of underperforming U.S. stores, recalibrate its Biggie Bag pricing, and prioritize dividends over debt-funded buybacks, with a conservative 2026 guidance. (Source: Zacks Consensus Estimate)

1.c. Company Highlights

2. Wendy's Delivers Mixed Results Amid Turnaround Efforts

The Wendy's Company reported a mixed bag in its fourth-quarter 2025 results, with total adjusted revenue coming in at $439.6 million, a decrease of $19.7 million compared to the prior year. Adjusted EBITDA was $113.3 million, down $24.2 million versus the prior year, while adjusted earnings per share was $0.16, beating estimates of $0.14. The company's global system-wide sales declined 8.3%, with U.S. same-restaurant sales down 11.3%. Despite the decline, the company made progress in scaling its digital business, with U.S. digital sales growing 12.4% and reaching 20% of the full-year U.S. digital mix.

Publication Date: Feb -17

📋 Highlights
  • Declining Sales:: 2025 global system-wide sales fell 3.5%, with U.S. same-restaurant sales down 11.3% in Q4, driven by lower traffic despite higher average checks.
  • Digital Growth:: U.S. digital sales surged 12.4% in 2025, reaching 20% of full-year U.S. sales, with a peak 20.6% in Q4.
  • Project Fresh Impact:: System optimization (closing 5-6% of U.S. restaurants) will reduce global sales by 4% and drag $15–20M on 2026 adjusted EBITDA.
  • 2026 Outlook:: Adjusted EBITDA expected $460–480M, flat global sales, and U.S. same-restaurant sales improvement via operational reforms and new product launches (e.g., Girl Scout Thin Mint Frosty).
  • Capital Allocation:: $205–205M free cash flow projected in 2026, with $100M dividend payout and $120–130M CapEx, alongside $300M credit facility flexibility.

Operational Highlights

The company is making strides in its Project Fresh turnaround strategy, focusing on brand revitalization, operational excellence, system optimization, and capital allocation. Key actions include a new marketing and menu approach, strengthening everyday value offerings, and prioritizing meaningful innovation across hamburgers and chicken. The company is also optimizing its restaurant base, with plans to close 5-6% of underperforming U.S. restaurants, which is expected to improve franchisee economics and customer experience.

Outlook and Guidance

For 2026, the company expects global system-wide sales to be approximately flat to the prior year, with U.S. same-restaurant sales improving as the year progresses. International business is expected to see continued robust net unit growth, with approximately the same number of international net new units as in 2025. Adjusted EBITDA is anticipated to range from $460 million to $480 million, and adjusted EPS is expected to be $0.56 to $0.60 per share. The company expects free cash flow of $190 million to $205 million and has a balanced capital allocation strategy, prioritizing investments with high return opportunities while sustaining international expansion momentum and returning cash to shareholders through dividends.

Valuation and Metrics

With a P/E Ratio of 8.62 and an EV/EBITDA of 10.8, the market appears to have priced in some of the challenges facing the company. However, the Dividend Yield of 8.96% and Free Cash Flow Yield of 17.04% suggest that the stock may be attractive to income investors. Analysts estimate next year's revenue growth at 1.2%, which is relatively modest. As the company continues to execute on its Project Fresh strategy, investors will be watching for signs of improvement in same-restaurant sales and margins.

3. NewsRoom

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Most people have already gotten their tax refunds. That's bad news for restaurants and retailers.

Mar -30

Source: marketwatch.com

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Wendy's Iconic Spicy Chicken Sandwich Upgrade Brings the Heat That Hits

Mar -30

Source: prnewswire.com

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Wendy's Launches DC Rides Kids' Meal featuring 12 Collectible DC Super Heroes, Super-Villains and Rides

Mar -25

Source: prnewswire.com

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Dow Up Over 1,000 Points as War Respite Drives Optimism

Mar -23

Source: schaeffersresearch.com

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Wendy's Takes the Court as the Official Dunks Partner of March Madness®, Introducing a New Tournament Ready Dunks Menu

Mar -16

Source: prnewswire.com

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Wendy's Invites Fans to Apply to Be First-Ever Chief Tasting Officer by March 30

Mar -11

Source: prnewswire.com

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Wendy's Offers 'A Job AI Can't Steal'— Could You Be Their $100K Chief Tasting Officer?

Mar -07

Source: feeds.benzinga.com

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First Look: Oil Spike, Warsh Nomination, JNJ Drug Win, MCD Buzz

Mar -06

Source: gurufocus.com

4. Business Breakdown

4.a. Revenues by Country

4.b. Revenues by Segment

5. Expected revenues mid-term growth (4.37%)

6. Segments

Wendy's United States

Expected Growth: 4.5%

Wendy's US growth driven by successful marketing campaigns, menu innovation, and digital transformation. Increased focus on convenience, including mobile ordering and curbside pickup, has attracted more customers. Additionally, remodels of existing locations and expansion of breakfast offerings have contributed to sales growth.

Global Real Estate & Development

Expected Growth: 3.5%

The Wendy's Company's Global Real Estate & Development segment growth of 3.5% is driven by strategic restaurant openings, remodels, and relocations, as well as increased sales from existing locations. Additionally, the company's focus on digital transformation, menu innovation, and marketing efforts contribute to the growth, while also benefiting from a favorable real estate market and effective cost management.

Wendy's International

Expected Growth: 4.2%

Wendy's International's 4.2% growth is driven by successful marketing campaigns, menu innovation, and digital transformation. The brand's focus on quality, convenience, and value resonates with customers. Additionally, strategic partnerships, such as the breakfast launch with DoorDash, and investments in restaurant remodels and technology upgrades contribute to the growth momentum.

7. Detailed Products

Burgers

Wendy's signature square-shaped beef burgers made with fresh, never frozen beef

Chicken Nuggets

Tender and juicy chicken breast pieces in a variety of sauces

Fries

Thick-cut, sea-salt fries cooked to a golden crisp

Salads

Fresh, made-to-order salads with a variety of toppings and dressings

Breakfast Items

A variety of breakfast sandwiches, burritos, and biscuits

Beverages

Soft drinks, iced tea, coffee, and Frosty desserts

Value Meals

Combination meals featuring a sandwich, fries, and a drink

8. The Wendy's Company's Porter Forces

Forces Ranking

Threat Of Substitutes

The threat of substitutes for The Wendy's Company is medium because while there are many substitutes for fast food, Wendy's has a strong brand reputation and customer loyalty.

Bargaining Power Of Customers

The bargaining power of customers for The Wendy's Company is high because customers have many options for fast food and can easily switch to a competitor if they are not satisfied.

Bargaining Power Of Suppliers

The bargaining power of suppliers for The Wendy's Company is low because the company has a strong supply chain and can negotiate good prices with its suppliers.

Threat Of New Entrants

The threat of new entrants for The Wendy's Company is low because it is difficult for new companies to enter the fast food market and compete with established brands like Wendy's.

Intensity Of Rivalry

The intensity of rivalry for The Wendy's Company is high because the fast food industry is highly competitive and companies like McDonald's, Burger King, and KFC are strong competitors.

9. SWOT Analysis

Strength

Weaknesses

Opportunities

Threats

10. Capital Structure

10.a. Balance Sheet

10.b. Weighted Average Cost of capital

Value
Debt Weight 90.14%
Debt Cost 4.10%
Equity Weight 9.86%
Equity Cost 7.82%
WACC 4.46%
Leverage 914.09%

11. Quality Control: The Wendy's Company passed 6 out of 9 key points

12.a Historical Valuation

12.b Price/Earnings Ratio

12.c Margin Valuation

12.d Peers Valuation

Peers Group Analysis

Stock-Card
Darden

A-Score: 6.1/10

Value: 4.0

Growth: 6.0

Quality: 5.4

Yield: 6.0

Momentum: 6.0

Volatility: 9.0

1-Year Total Return ->

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Stock-Card
Wendy's

A-Score: 5.6/10

Value: 6.3

Growth: 5.9

Quality: 4.8

Yield: 9.0

Momentum: 0.0

Volatility: 7.3

1-Year Total Return ->

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Texas Roadhouse

A-Score: 5.4/10

Value: 2.6

Growth: 8.2

Quality: 5.5

Yield: 4.0

Momentum: 4.0

Volatility: 8.3

1-Year Total Return ->

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Domino's Pizza

A-Score: 5.4/10

Value: 4.2

Growth: 6.4

Quality: 6.0

Yield: 3.0

Momentum: 4.0

Volatility: 8.7

1-Year Total Return ->

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Brinker

A-Score: 4.7/10

Value: 4.7

Growth: 8.0

Quality: 5.4

Yield: 0.0

Momentum: 6.0

Volatility: 4.0

1-Year Total Return ->

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Wingstop

A-Score: 4.4/10

Value: 2.5

Growth: 9.4

Quality: 6.9

Yield: 1.0

Momentum: 3.0

Volatility: 3.3

1-Year Total Return ->

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Peers Metrics

12.e Scoring Insights

12.f DCF BETA

Parameters

Short Term Growth

Short term Time

Long-Term Growth

WACC

Target Price

6.88$

Current Price

6.88$

Potential

-0.00%

Expected Cash-Flows