Wingstop (WING): Assessing Valuation After a 15% Year-To-Date Share Price Pullback

Wingstop (WING) has quietly slipped this year, with the stock down about 15% year to date even as revenue and net income keep growing. That disconnect is what makes the setup interesting.

See our latest analysis for Wingstop.

After a huge multiyear run, Wingstop’s year to date share price return of negative 15.26 percent, including a 90 day share price return of negative 9.91 percent, suggests momentum has cooled even as the three year total shareholder return sits comfortably positive.

If Wingstop’s pullback has you rethinking where growth might come from next, it could be worth exploring fast growing stocks with high insider ownership as a fresh hunting ground for potential winners.

With revenue still growing double digits and analysts seeing nearly 30 percent upside from here, is Wingstop now trading below its true potential, or has the market already baked in the next leg of growth?

Most Popular Narrative Narrative: 22.2% Undervalued

Wingstop’s fair value in the most followed narrative sits above the last close of $247.49, framing the recent pullback as a potential mispricing.

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.

Read the complete narrative.

Curious how this story gets to a premium future earnings multiple on only moderate profit growth and steady revenue expansion, all discounted at a precise hurdle rate? Dive in to see which assumptions really carry the valuation.

Result: Fair Value of $318.08 (UNDERVALUED)

Have a read of the narrative in full and understand what's behind the forecasts.

However, softer demand among value conscious diners and limited breakthrough menu innovation could pressure same store sales and challenge the high growth assumptions baked into forecasts.

Find out about the key risks to this Wingstop narrative.

Another Way of Looking at Value

Our SWS DCF model paints a cooler picture than the bullish narrative, putting Wingstop’s fair value closer to $216.55, which makes the current $247.49 share price look overvalued rather than cheap. If cash flows are right and the story is wrong, which signal should investors trust?

Look into how the SWS DCF model arrives at its fair value.

Simply Wall St performs a discounted cash flow (DCF) on every stock in the world every day (check out Wingstop for example). We show the entire calculation in full. You can track the result in your watchlist or portfolio and be alerted when this changes, or use our stock screener to discover 894 undervalued stocks based on their cash flows. If you save a screener we even alert you when new companies match - so you never miss a potential opportunity.

Build Your Own Wingstop Narrative

If this view does not quite fit your thinking, or you prefer hands on research, you can build a personalized take in minutes: Do it your way.

A great starting point for your Wingstop research is our analysis highlighting 3 key rewards and 3 important warning signs that could impact your investment decision.

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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.

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