WING Stock Study (5-28-26)

Posted by Mark on June 11, 2026 at 07:24 | Last modified: May 28, 2026 09:52

I recently did a stock study on Wingstop Inc. (WING, $152.09).

M* writes:

     > Wingstop is a fast casual restaurant concept built around a simple
     > chicken-centric menu. The firm primarily offers bone-in and
     > boneless wings, tenders, and a chicken sandwich, customizable
     > across 12 flavors. The banner generated $5.3 billion in system
     > sales in 2025 across 3,056 units, with 85% located in the US.
     > Wingstop largely operates as a franchisor, with 98% of units
     > franchised, and earns revenue largely from collecting royalties
     > and advertising fees paid by franchisees, with a smaller
     > contribution from company-owned restaurant sales.

Over the past decade, this small-size company grows sales and EPS at annualized rates of 26.0% and 24.1%, respectively. I am using adjusted EPS of $3.70/share throughout for 2025 rather than GAAP $6.21 because the latter includes a massive, non-recurring pre-tax gain ($60M – $70M) from the sale of Lemon Pepper Holdings in Q1 2025. Lines are mostly up, straight, and parallel except for EPS declines in ’18 and ’19. Ten-year EPS R^2 is 0.88 and Value Line (VL) gives an Earnings Predictability score of 80. Shares outstanding decrease 3.1% (0.3%/year).

Over the past decade, PTPM leads peer averages but lags the industry while ranging from 10.8% in ’20 to 29.5% in ’17 with a last-5-year mean of 21.7%. ROE is N/A (negative) due to the company maintaining a large shareholder deficit. Debt-to-Capital in the triple digits is also N/A because the company uses loans to fund special dividends and because it owns few physical locations (98% franchised) thereby allowing liabilities to easily outpace assets.

Quick ratio is 1.6 and interest coverage 5.2 per M* who assigns “Narrow” Economic Moat, “Exemplary” rating for Capital Allocation, but a C grade for Financial Health (per BetterInvesting® website). VL gives a B grade for Financial Strength (and 5.5x interest coverage).

With regard to sales growth:

• YF gives YOY ACE 11.8% and 15.4% for ’26 and ’27 (based on 29 analysts).
• Zacks gives YOY ACE 11.1% and 14.4% for ’26 and ’27, respectively (6 analysts).
• VL projects 14.1% per year from ’25-’30.
• CFRA gives ACE 11.8% YOY and 13.6% per year for ’26 and ’25-’27, respectively (30).
• M* gives 2-year ACE of 14.0% per year and projects 5-year CAGR of 12.9% in Equity Report.

My 11.0% per year forecast is below the range.

With regard to EPS growth:

• MarketWatch gives ACE 19.5% and 21.1% per year for ’25-’27 and ’25-’28, respectively (based on 32 analysts).
• Nasdaq.com gives ACE 21.1% YOY and 18.3% per year for ’27 and ’26-’28 (9 / 9 / 2 analysts for ’26 / ’27 / ’28).
• Seeking Alpha projects 4-year CAGR of 19.5%.
• Finviz gives 5-year annualized ACE of 19.4% (8).
• LSEG projects LTG at 18.3%.
• YF gives YOY ACE 11.9% and 22.5% for ’26 and ’27, respectively (29).
• Zacks gives YOY ACE 12.5% and 21.1% for ’26 and ’27 (9) along with 5-year CAGR of 19.5%.
• VL projects 19.8% per year from ’25-’30.
• CFRA gives ACE 23.5% YOY and 23.0% per year for ’26 and ’25-’27 (30).
• M* gives long-term 15.1% per year ACE and projects 5-year CAGR of 22.1% in Equity Report.

My 15.0% forecast is below the long-term-estimate range (mean of seven: 19.1%). Initial value is ’25 adjusted EPS of $3.70/share rather than 2026 Q1 EPS of $4.02 (TTM).

My Forecast High P/E is 40.0. Over the past 10 years, high P/E ranges from 46.5 in ’17 to 218 in ’20 with a last-5-year mean of 113 and last-5-year-mean average P/E of 85.7. I am below the 10-year range.

My Forecast Low P/E is 30.0. Over the past 10 years, low P/E ranges from 26.6 in ’17 to 87.1 in ‘ 19 with a last-5-year mean of 58.6. I am forecasting near bottom of the range (only ’17 is less).

My Low Stock Price Forecast (LSPF) of $111.00 is default based on initial value from above: 27.0% less than previous close and 4.6% less than the 52-week low.

Over the past decade, Payout Ratio (PR) ranges from 15.1% in ’17 to 896% in ’18 with a last-5-year mean of 80.5%. I am forecasting below the range at 15.0%.

These inputs land WING in the BUY zone with a U/D ratio of 3.5. Total Annualized Return (TAR) is 14.7%.

PAR (using Forecast Average—not High—P/E) of 11.8% is less than I seek for a small-size company. If a healthy margin of safety (MOS) anchors the study, then I can proceed based on TAR instead.

To assess MOS, I start by comparing my inputs with those of Member Sentiment (MS). Based on only 23 studies (too small for anything but anecdotal comparison) done in the past 90 days (eight outliers including mine excluded), averages (lower of mean/median) for projected sales growth, projected EPS growth, Forecast High P/E, Forecast Low P/E, and PR are 14.9%, 15.0%, 40.0, 28.4, and 25.0% respectively. I am higher on the fourth, equal on the second and third, and lower on the other two. VL projects a future average P/E of 27.0 that is less than MS (34.2) and less than mine (35.0).

MS high / low EPS are $11.08 / $5.68 versus my $7.44 / $3.70 (per share). My high EPS is less due to a lower initial value. VL (M*) high EPS of $10.10 ($10.03) is in the middle.

MS LSPF of $122.00 implies a Forecast Low P/E of 21.5: less than the above-stated 28.4. MS LSPF is 24.4% less than the default $5.68/share * 28.4 = $161.31 resulting in more conservative zoning. MS LSPF still exceeds mine by 9.9%.

MOS is robust in the study because my inputs are near or less than historical/analyst averages/ranges. In support of the MOS, MS TAR exceeds mine by 9.5% per year (too much, actually).

With regard to valuation, PEG is 1.7 and 2.2 per Zacks and my projected P/E, respectively: slightly high (M* has 1.1). Relative Value [(current P/E) / 5-year-mean average P/E] is quite cheap at 0.44. “Quick and Dirty” DCF method has stock fairly valued while M* reports the stock at a 9% premium.

Per U/D, WING is a BUY right now under $157/share. [297.6 / ((14.47 / 100 ) +1 ) ^ 5] ~ $151 will meet BetterInvesting® TAR criterion given a forecast high price ~$298.

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