Earnings Release: Here's Why Analysts Cut Their Wingstop Inc. (NASDAQ:WING) Price Target To US$328

Shareholders in Wingstop Inc. (NASDAQ:WING) had a terrible week, as shares crashed 23% to US$234 in the week since its latest yearly results. Wingstop reported in line with analyst predictions, delivering revenues of US$626m and statutory earnings per share of US$3.70, suggesting the business is executing well and in line with its plan. Earnings are an important time for investors, as they can track a company's performance, look at what the analysts are forecasting for next year, and see if there's been a change in sentiment towards the company. So we gathered the latest post-earnings forecasts to see what estimates suggest is in store for next year.

View our latest analysis for Wingstop

Taking into account the latest results, the consensus forecast from Wingstop's 24 analysts is for revenues of US$737.3m in 2025. This reflects a notable 18% improvement in revenue compared to the last 12 months. Statutory per share are forecast to be US$3.74, approximately in line with the last 12 months. Before this earnings report, the analysts had been forecasting revenues of US$749.8m and earnings per share (EPS) of US$4.47 in 2025. So there's definitely been a decline in sentiment after the latest results, noting the real cut to new EPS forecasts.

It might be a surprise to learn that the consensus price target fell 8.2% to US$328, with the analysts clearly linking lower forecast earnings to the performance of the stock price. Fixating on a single price target can be unwise though, since the consensus target is effectively the average of analyst price targets. As a result, some investors like to look at the range of estimates to see if there are any diverging opinions on the company's valuation. Currently, the most bullish analyst values Wingstop at US$468 per share, while the most bearish prices it at US$181. This is a fairly broad spread of estimates, suggesting that analysts are forecasting a wide range of possible outcomes for the business.

One way to get more context on these forecasts is to look at how they compare to both past performance, and how other companies in the same industry are performing. It's pretty clear that there is an expectation that Wingstop's revenue growth will slow down substantially, with revenues to the end of 2025 expected to display 18% growth on an annualised basis. This is compared to a historical growth rate of 22% over the past five years. By way of comparison, the other companies in this industry with analyst coverage are forecast to grow their revenue at 9.7% annually. So it's pretty clear that, while Wingstop's revenue growth is expected to slow, it's still expected to grow faster than the industry itself.

The Bottom Line

The most important thing to take away is that the analysts downgraded their earnings per share estimates, showing that there has been a clear decline in sentiment following these results. Happily, there were no major changes to revenue forecasts, with the business still expected to grow faster than the wider industry. The consensus price target fell measurably, with the analysts seemingly not reassured by the latest results, leading to a lower estimate of Wingstop's future valuation.

With that in mind, we wouldn't be too quick to come to a conclusion on Wingstop. Long-term earnings power is much more important than next year's profits. At Simply Wall St, we have a full range of analyst estimates for Wingstop going out to 2027, and you can see them free on our platform here..

Before you take the next step you should know about the 2 warning signs for Wingstop that we have uncovered.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.