Last Update 02 Dec 25

Fair value Increased 0.012%

WING: Expansion Momentum And 70% Franchisee Returns Will Support Future Upside

The analyst price target for Wingstop saw a modest adjustment upward to $318.08, as analysts cite mixed quarter results but highlight ongoing unit growth and resilient profitability drivers despite broader industry headwinds.

Analyst Commentary

Analyst opinions on Wingstop remain divided following recent quarterly results, with several noting revised price targets and moderating estimates in response to mixed signals from the company and broader industry trends. The outlook features a blend of ongoing optimism about core strengths and recognition of temporary headwinds facing the restaurant sector.

Bullish Takeaways

Despite near-term sales and estimate cuts, analysts highlight Wingstop’s robust pipeline and repeated upward adjustments to its unit growth outlook, pointing to enduring long-term expansion potential.
The company continues to demonstrate strong franchisee returns, with cash-on-cash returns cited above 70 percent, supporting confidence in store economics and ongoing development.
Bullish analysts believe strategic initiatives, including a new advertising campaign, tech-enabled 'Smart Kitchen,' and an upcoming loyalty plan, are well positioned to reaccelerate sales growth and offset macroeconomic uncertainty by fiscal 2026.
Wingstop’s persistent profitability and better-than-expected store openings are consistently cited as offsets to softer comparable sales, reinforcing a favorable view on execution and growth prospects.

Bearish Takeaways

Numerous analysts are tempering valuation targets due to disappointing same-store sales and lower topline results, indicating near-term growth moderation amid industry-wide pressures.
Sector-wide headwinds such as slowing consumer spending in quick-service and industry softness, especially among lower-income diners and younger demographics, raise questions on the pace of traffic recovery.
Bearish analysts point to increased skepticism toward higher valuation multiples as investor enthusiasm has waned, with macro pressures weighing on sentiment even for outperforming concepts.
Some anticipate continued earnings volatility and cautious guidance into early next year, as inflation and competitive pressures may persist despite Wingstop’s execution strengths.

What's in the News

Wingstop celebrated the opening of its 3,000th restaurant globally, having expanded its international footprint by 50% in the past two years and entered six new markets, including Australia and The Netherlands. The company now operates in 47 U.S. states and 15 countries, with upcoming openings planned for Thailand, Italy, and Ireland. (Key Developments)
The company provided updated earnings guidance for fiscal year 2025, forecasting domestic same-store sales to decline by 3% to 4%, reflecting recent consumer trends and macroeconomic softness. Despite this outlook, fundamentals for the brand are reported as strong. (Key Developments)
Wingstop is preparing major Canadian expansion with its first Calgary location planned for 2026 as part of a 100-location agreement. The company aims to introduce a store design focused on Gen-Z consumers and high traffic features such as a live DJ booth. (Key Developments)
Two new limited-time menu flavors were launched nationwide: Fiery Lime, inspired by the popular spicy margarita, and Smoky Chipotle Rub, a dry rub with BBQ and fire-roasted pepper notes. Both are designed to appeal to bold flavor seekers. (Key Developments)
The company completed another $39.97 million in share repurchases, bringing its total buyback to over 2.3 million shares, or 8.02% of shares outstanding, under a program initiated in 2023. (Key Developments)

Valuation Changes

Consensus Analyst Price Target: Increased marginally from $318.04 to $318.08. This reflects a very modest reassessment upward.
Discount Rate: Decreased slightly, moving from 8.73% to 8.67%. This indicates a minor improvement in perceived risk or cost of capital.
Revenue Growth: Declined from 17.00% to 16.72%. This shows a small reduction in expected top-line expansion.
Net Profit Margin: Risen moderately from 17.58% to 17.82%. This points to a slight improvement in projected profitability.
Future P/E: Decreased from 53.13x to 52.74x. This signals a minor reduction in expected future earnings multiple.

Digital innovation and operational upgrades are driving stronger customer engagement, more efficient service, and higher profit margins for both company-owned and franchised restaurants.
Global expansion, strategic partnerships, and menu innovation are elevating brand presence, attracting new customers, and supporting sustained systemwide sales and revenue growth.
Softening demand, limited menu innovation, expansion risks, rising labor costs, and consumer price sensitivity could collectively undermine revenue growth and profitability.

Catalysts

About Wingstop

Wingstop Inc., together with its subsidiaries, franchises and operates restaurants under the Wingstop brand.What are the underlying business or industry changes driving this perspective?

The rapid roll-out and full system implementation of the Wingstop Smart Kitchen platform is significantly improving operational efficiency, order throughput, guest satisfaction, speed of service, and consistency, which is expected to drive higher same-store sales, increased delivery frequency, and better net margins as restaurants ramp to the new model.
Accelerated global unit development-fueled by record-high franchisee returns and unprecedented brand partner reinvestment-is expanding Wingstop's footprint in both established and underpenetrated international markets, positioning the company for substantial systemwide sales growth and a rising share of high-margin franchise fee revenue.
The expansion and planned system-wide launch of MyWingstop's proprietary digital infrastructure-including hyper-personalized marketing and a new loyalty program leveraging a rapidly growing 60 million-member digital guest database-sets the stage for higher customer engagement, increased transaction frequency, and a sustained lift in digital sales mix, supporting long-term earnings growth.
Continued focus on value-driven bundled promotions and menu innovation, such as the successful relaunch of crispy chicken tenders, is helping capture increased demand for convenient, affordable, and shareable dining, enabling Wingstop to attract new and lapsed guests while protecting average check and maintaining targeted food cost margins.
Growing brand awareness-amplified through high-profile partnerships (NBA, Amazon/NFL/streaming placements), increased marketing investment, and international market buzz-is expected to close the awareness gap versus larger QSR brands, broadening market reach and driving incremental revenue, especially as secular trends in urbanization and digital adoption expand the overall addressable market.

Wingstop Future Earnings and Revenue Growth

Assumptions

How have these above catalysts been quantified?

Analysts are assuming Wingstop's revenue will grow by 18.9% annually over the next 3 years.
Analysts assume that profit margins will shrink from 25.6% today to 17.8% in 3 years time.
Analysts expect earnings to reach $200.9 million (and earnings per share of $7.56) by about September 2028, up from $171.5 million today.
In order for the above numbers to justify the analysts price target, the company would need to trade at a PE ratio of 61.4x on those 2028 earnings, up from 46.8x today. This future PE is greater than the current PE for the US Hospitality industry at 23.9x.
Analysts expect the number of shares outstanding to decline by 4.41% per year for the next 3 years.
To value all of this in today's terms, we will use a discount rate of 8.82%, as per the Simply Wall St company report.

Wingstop Future Earnings Per Share Growth

Risks

What could happen that would invalidate this narrative?

Consumer demand has shown softness, particularly among lower income and Hispanic consumers, which persists despite targeted marketing and value deals; if this continues or broadens, it could hinder revenue growth and same-store sales recovery.
Wingstop's innovation pipeline is heavily reliant on tenders and sandwich relaunches, but there appears to be limited breakthrough menu innovation beyond core offerings-if consumer tastes shift or fatigue sets in, this could limit comps growth and impact long-term revenue momentum.
Rapid international and domestic expansion increases the risk of overpenetration, potential cannibalization, and misalignment with diverse local consumer preferences; if new stores underperform or dilute overall brand value, systemwide sales and franchisee profitability could suffer, pressuring overall earnings.
Continued labor cost inflation, as implied by headcount-related SG&A increases and macroeconomic uncertainty, could erode net margins, especially as the company scales and relies on asset-light franchising, where franchisee cost pressures may eventually impact store openings and closures.
Persistent consumer anxiety about elevated prices and economic outlook, combined with increased promotional activity and value bundling, raises the risk that future growth may require deeper discounting, pressuring average checks and net income margins.

Valuation

How have all the factors above been brought together to estimate a fair value?

The analysts have a consensus price target of $398.545 for Wingstop based on their expectations of its future earnings growth, profit margins and other risk factors. However, there is a degree of disagreement amongst analysts, with the most bullish reporting a price target of $477.0, and the most bearish reporting a price target of just $185.0.
In order for you to agree with the analyst's consensus, you'd need to believe that by 2028, revenues will be $1.1 billion, earnings will come to $200.9 million, and it would be trading on a PE ratio of 61.4x, assuming you use a discount rate of 8.8%.
Given the current share price of $287.45, the analyst price target of $398.55 is 27.9% higher.
We always encourage you to reach your own conclusions though. So sense check these analyst numbers against your own assumptions and expectations based on your understanding of the business and what you believe is probable.

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Disclaimer

AnalystConsensusTarget is a tool utilizing a Large Language Model (LLM) that ingests data on consensus price targets, forecasted revenue and earnings figures, as well as the transcripts of earnings calls to produce qualitative analysis. The narratives produced by AnalystConsensusTarget are general in nature and are based solely on analyst data and publicly-available material published by the respective companies. These scenarios are not indicative of the company's future performance and are exploratory in nature. Simply Wall St has no position in the company(s) mentioned. Simply Wall St may provide the securities issuer or related entities with website advertising services for a fee, on an arm's length basis. These relationships have no impact on the way we conduct our business, the content we host, or how our content is served to users. The price targets and estimates used are consensus data, and do not constitute a recommendation to buy or sell any stock, and they do not take account of your objectives, or your financial situation. Note that AnalystConsensusTarget's analysis may not factor in the latest price-sensitive company announcements or qualitative material.

WING: Franchise Expansion And Digital Efforts Will Drive Long-Term Upside Potential