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1. Company Snapshot

1.a. Company Description

Wingstop Inc., together with its subsidiaries, franchises and operates restaurants under the Wingstop brand name.Its restaurants offer classic wings, boneless wings, and tenders that are cooked-to-order, and hand-sauced-and-tossed in various flavors.As of December 25, 2021, the company had 1,695 franchised restaurants and 36 company-owned restaurants in 44 states and 7 countries worldwide.


Wingstop Inc.was founded in 1994 and is headquartered in Addison, Texas.

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1.b. Last Insights on WING

Wingstop Inc.'s recent performance has been impacted by a decline in domestic same-store sales, which decreased by 5.6% in Q3 2025. The company reported record net new openings, with 114 locations added in the quarter, representing a 19.3% growth in net new units. Adjusted EBITDA increased 18.6% to $63.7 million, the highest quarter on record. A shareholder investigation was announced, but no details were provided on its potential impact. Steadfast Capital Management and Darsana Capital have recently increased their stakes in the company.

1.c. Company Highlights

2. Wingstop's Q3 Earnings: A Strong Performance Amidst a Challenging Environment

Wingstop's Q3 financial performance was robust, with system-wide sales growing by 13% and adjusted EBITDA increasing by 17%. The company's highly franchised asset-light model delivered a strong performance, with adjusted earnings per diluted share coming in at $1.09, beating estimates of $0.91. Revenue growth was driven by a 19% unit growth rate, with 369 net new restaurants opened during the quarter. The company's supply chain strategy provided stability in food costs, with visibility into food and packaging costs throughout 2026 at the targeted range in the mid-30%.

Publication Date: Nov -13

📋 Highlights
  • Unit Growth Acceleration: 369 net new restaurants opened in Q1-Q3 2025, achieving 19% unit growth, exceeding long-term guidance of 10%+.
  • System-Wide Sales Milestone: Trailing 12-month system-wide sales surpassed $5 billion, with 13% YoY growth in Q3.
  • Adjusted EBITDA Record: Q3 adjusted EBITDA reached $1.09 per diluted share, reflecting 17% growth and a 15.6% YoY increase.
  • 2025 Development Guidance Raised: Global unit growth now projected at 475-485 new restaurants, up from prior expectations.
  • Same-Store Sales Downturn: 5.6% Q3 decline attributed to macroeconomic pressures, with confidence in 2026 recovery via Smart Kitchen and loyalty initiatives.

Operational Highlights

The company's new kitchen operating platform, Wingstop's Smart Kitchen, has been a game-changer, delivering significant improvements in speed and consistency. Many restaurants have consistently delivered a 10-minute speed of service, and consumer research shows that speed and consistency are sizable opportunities for the company to become more of the consumers' consideration set. As Michael Skipworth noted, the company is "leaning into its game-changing kitchen operating platform...to ensure operational excellence and win its fair share of demand space."

Same-Store Sales Decline

Despite the strong unit growth, Wingstop experienced a 5.6% decline in same-store sales in Q3, below expectations. However, the company believes this is temporary and that the current consumer environment will prove to be cyclical. The company is investing in strategies to position itself for same-store sales growth, including a new marketing campaign and loyalty program.

Valuation Metrics

Wingstop's valuation metrics indicate a premium valuation, with a P/E Ratio of 38.63 and an EV/EBITDA of 22.21. The company's ROE is negative, at -25.08%, while its ROIC is 19.93%. Analysts estimate next year's revenue growth at 17.7%, which may justify some of the premium valuation. However, investors should carefully consider the company's valuation metrics and growth prospects before making investment decisions.

Outlook

The company is confident in its ability to deliver sustained same-store sales growth in 2026, driven by its Smart Kitchen rollout, loyalty program, and hyper-personalization strategies. Wingstop is updating its full-year outlook for domestic same-store sales to a decline of 3% to 4% and increasing its global unit growth guidance to 475-485 net new restaurants for 2025. With a strong development pipeline and record demand for new development, the company is well-positioned for long-term growth.

3. NewsRoom

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Wingstop Expands Through Consumer Weakness While Chipotle Fights Margin Compression

Dec -03

Source: 247wallst.com

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Top 15 High-Growth Dividend Stocks For December 2025

Dec -02

Source: seekingalpha.com

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Wingstop Opens 3,000th Restaurant, Showcasing Strength in Development

Nov -26

Source: prnewswire.com

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Alger Mid Cap 40 ETF Q3 2025 Portfolio Update

Nov -20

Source: seekingalpha.com

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Artisan Global Discovery Fund: Q3 Delivers Strong Results Amid Trimming And Exits

Nov -20

Source: seekingalpha.com

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Darsana Capital Opens New $189 Million Wingstop Position: Is the Stock a Buy?

Nov -18

Source: fool.com

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Why I Keep Buying These 10 Incredible Growth Stocks

Nov -17

Source: fool.com

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Alger SICAV - Alger Small Cap Focus Fund Q3 2025 Portfolio Update

Nov -16

Source: seekingalpha.com

4. Business Breakdown

4.a. Revenues by Country

4.b. Revenues by Segment

5. Expected revenues mid-term growth (12.57%)

6. Segments

Royalty, Franchise Fees and Other

Expected Growth: 12%

Wingstop's 12% growth in Royalty, Franchise Fees, and Other is driven by increasing same-store sales, unit expansion, and higher average royalty rates. Additionally, the company's strategic initiatives, such as digital transformation and menu innovation, contribute to the growth. Furthermore, the rise of delivery and online ordering also boosts royalty income, while franchisees' investments in restaurant remodels and technology upgrades support franchise fee growth.

Advertising Fees

Expected Growth: 10%

Wingstop Inc.'s 10% growth in Advertising Fees is driven by increasing brand awareness, expansion into new markets, and a shift towards digital advertising. Additionally, the company's focus on loyalty programs, online ordering, and delivery services has led to higher advertising spend. Furthermore, Wingstop's franchise model allows for collective advertising efforts, resulting in increased advertising fees.

Company-owned Restaurant

Expected Growth: 18%

Wingstop Inc.'s company-owned restaurant segment growth of 18% is driven by increasing same-store sales, expansion of digital capabilities, and strategic menu pricing. Additionally, the company's focus on operational efficiency, marketing initiatives, and unit growth in high-demand markets contribute to the segment's growth.

7. Detailed Products

Wings

Wingstop's signature product, offering a variety of flavors and sauces to choose from, including Atomic, Mango Habanero, and Lemon Pepper.

Tenders

Breaded and cooked to a crispy perfection, our tenders are a great alternative to wings, with the same great flavors and sauces.

Fries

Thick-cut and cooked to a crispy perfection, our fries are the perfect side dish to complement our wings and tenders.

Veggie Sticks

A healthier alternative to fries, our veggie sticks are a crispy and tasty snack option.

Desserts

A sweet treat to finish off your meal, our desserts include options like chocolate chip cookies and brownies.

Combo Meals

A convenient and affordable way to get a complete meal, our combo meals include a combination of wings, tenders, fries, and a drink.

Catering

Wingstop's catering service offers a variety of options for events and parties, including wings, tenders, and sides.

8. Wingstop Inc.'s Porter Forces

Forces Ranking

Threat Of Substitutes

Wingstop's menu items are highly differentiated, and customers are loyal to the brand. The threat of substitutes is low.

Bargaining Power Of Customers

Wingstop's customers have some bargaining power due to the presence of competitors, but the brand's loyalty program and customer retention strategies mitigate this power.

Bargaining Power Of Suppliers

Wingstop has a diversified supplier base, and the company's scale of operations gives it bargaining power over suppliers.

Threat Of New Entrants

While there are barriers to entry in the fast-casual restaurant industry, new entrants can still pose a threat to Wingstop. However, the company's strong brand recognition and operational efficiency provide a competitive advantage.

Intensity Of Rivalry

The fast-casual restaurant industry is highly competitive, with many established players competing for market share. Wingstop must continually innovate and improve its offerings to maintain its market position.

9. SWOT Analysis

Strength

Weaknesses

Opportunities

Threats

10. Capital Structure

10.a. Balance Sheet

10.b. Weighted Average Cost of capital

Value
Debt Weight 277.73%
Debt Cost 3.95%
Equity Weight -177.73%
Equity Cost 12.10%
WACC -10.54%
Leverage -156.27%

11. Quality Control: Wingstop Inc. passed 7 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: 6.3/10

Value: 3.9

Growth: 6.0

Quality: 5.2

Yield: 6.0

Momentum: 8.0

Volatility: 8.7

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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Domino's Pizza

A-Score: 5.5/10

Value: 4.4

Growth: 6.3

Quality: 6.0

Yield: 3.0

Momentum: 5.0

Volatility: 8.3

1-Year Total Return ->

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Texas Roadhouse

A-Score: 5.5/10

Value: 2.6

Growth: 8.2

Quality: 5.7

Yield: 4.0

Momentum: 4.0

Volatility: 8.3

1-Year Total Return ->

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Stock-Card
Brinker

A-Score: 5.3/10

Value: 5.8

Growth: 8.0

Quality: 5.4

Yield: 0.0

Momentum: 8.5

Volatility: 4.3

1-Year Total Return ->

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Stock-Card
Wingstop

A-Score: 4.2/10

Value: 2.5

Growth: 9.4

Quality: 6.3

Yield: 2.0

Momentum: 1.5

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

-11.87$

Current Price

262.05$

Potential

-104.53%

Expected Cash-Flows