Wendy's (WEN) AI Stock Analysis

• Market Cap: $2.08B
• Dividend Yield: 7.86%
• Average Volume (3M): 7.14M
• Price to Earnings (P/E): 11.6
• Beta (1Y): 0.25
• Revenue Growth: 2.18%
• EPS Growth: -5.15%
• Country: US
• Employees: 4,833
• Sector: Consumer Cyclical
• Sector Strength: 71
• Industry: Restaurants
• EPS (TTM): 0.20
• Shares Outstanding: 192,025,250
• 10 Day Avg. Volume: 7,212,432
• 30 Day Avg. Volume: 7,139,182
• PEG Ratio: N/A
• Price to Book (P/B): 17.44
• Price to Sales (P/S): 0.00
• P/FCF Ratio: 8.84
• Enterprise Value/Market Cap: 2.84
• Enterprise Value/Revenue: 0.67
• Enterprise Value/Gross Profit: 7.48
• Enterprise Value/Ebitda: 2.71
• 1Y Price Target: $13.65
• Price Target Upside: 20.58% Upside
• Rating Consensus: Hold
• Number of Analyst Covering: 21

• Rating: 68 Neutral
• Price Target: $12.00 ▲(6.01%Upside)

Wendy's overall score reflects a balance of stable operational performance and attractive valuation, countered by high financial leverage and domestic market challenges. The company's strategic initiatives and leadership changes provide a positive outlook, but caution is advised due to potential headwinds in the U.S. market.

Positive Factors

International Market Opportunities

Analyst recommends moving to Overweight from Neutral due to de-risking of near term comps expectations and opportunities for development in underpenetrated international markets.

Shareholder Value

The company has significantly returned cash to shareholders through share repurchases, enhancing shareholder value.

Strategic Partnerships

Wendy's collaboration with SpongeBob Krabby Patty drove sales 10%+ during the promotion, showcasing the success of strategic partnerships.

Negative Factors

Comparable Sales

U.S. comparable sales declined, reflecting weather impacts and intensified consumer pressures, affecting overall performance.

Financial Guidance

Wendy's Company lowered its full-year guidance, implying potential challenges in maintaining market share amid competitive pressures.

Industry Challenges

The pressure across all income cohorts suggests that the QSR industry is no longer a trade-down beneficiary, following years of significant price increases.

Wendy's Business Overview & Revenue Model

Company Description

Wendy's Company (WEN) is a leading international fast-food chain, predominantly operating in the quick-service restaurant sector. Founded in 1969 by Dave Thomas, Wendy's is renowned for its square hamburgers, sea salt fries, and Frosty desserts. The company's core services include the preparation and sale of a variety of fresh, made-to-order burgers, chicken sandwiches, salads, and other side items, all emphasizing quality and taste. With a brand presence spanning numerous countries, Wendy's operates through company-owned and franchised locations, maintaining a commitment to quality ingredients and customer satisfaction.

How the Company Makes Money

Wendy's generates revenue primarily through the sale of food and beverages at its company-owned restaurants and through royalties and fees collected from its franchised locations. The company-owned restaurants contribute directly to its income through sales, while franchised locations pay ongoing royalties, typically a percentage of their sales, as well as initial franchise fees. Furthermore, Wendy's benefits from its real estate ownership and leasing arrangements, as it often leases properties to franchisees. Strategic partnerships and promotional collaborations also play a role in enhancing brand visibility and driving sales, contributing to the company's overall earnings.

Wendy's Financial Statement Overview

Summary

Wendy's demonstrates stable revenue growth and operational efficiency but faces challenges due to high financial leverage and declining equity levels. The ability to generate cash flow is stable, yet the significant debt load poses a risk for long-term sustainability.

Income Statement

Wendy's has shown stable revenue growth over recent years, with Total Revenue increasing from $1.73 billion in 2021 to $1.93 billion in TTM (Trailing-Twelve-Months). However, there has been a slight decrease in Gross Profit Margin, from 35.8% in 2021 to 34.7% in TTM. The Net Profit Margin also saw minor fluctuations, from 6.8% in 2021 to 9.9% in TTM. Despite these fluctuations, the EBIT and EBITDA margins have been stable, indicating strong operational efficiency.

Balance Sheet

The company's balance sheet reveals a high Debt-to-Equity ratio of 31.3 in TTM, indicating significant leverage. Stockholders' Equity has been decreasing over time, which raises concerns about financial stability. The Equity Ratio also decreased to 2.6% in TTM, suggesting limited equity financing. These factors highlight a potential risk due to high leverage, despite the company's ability to maintain its asset base.

Cash Flow

Wendy's cash flow demonstrates consistent Operating Cash Flow, although there was a decrease from $355 million in 2024 to $340 million in TTM. Free Cash Flow has remained fairly stable, with a minor decline from $260 million in 2024 to $246 million in TTM. The Operating Cash Flow to Net Income Ratio remains strong, indicating effective cash conversion from earnings, but the high financing cash outflows suggest potential challenges in maintaining cash reserves.

Breakdown	Dec 2024	Dec 2023	Mar 2023	Mar 2022	Mar 2021
Income Statement
Total Revenue	2.25B	2.18B	2.10B	1.90B	1.73B
Gross Profit	790.01M	776.47M	720.76M	536.66M	621.48M
EBITDA	554.23M	552.05M	501.63M	475.30M	403.31M
Net Income	194.36M	204.44M	177.37M	200.39M	117.83M
Balance Sheet
Total Assets	5.03B	5.18B	5.50B	5.10B	5.04B
Cash, Cash Equivalents and Short-Term Investments	450.51M	516.04M	745.89M	249.44M	306.99M
Total Debt	4.09B	4.14B	4.28B	3.86B	3.68B
Total Liabilities	4.78B	4.87B	5.03B	4.66B	4.49B
Stockholders Equity	259.35M	309.78M	465.72M	436.40M	549.60M
Cash Flow
Free Cash Flow	260.92M	260.39M	174.36M	267.79M	215.39M
Operating Cash Flow	355.31M	345.42M	259.90M	345.77M	284.36M
Investing Cash Flow	-129.31M	-86.55M	-77.78M	-154.67M	-68.25M
Financing Cash Flow	-303.10M	-504.30M	288.67M	-242.74M	-157.91M

Wendy's Technical Analysis

• Technical Analysis Sentiment: Neutral
• Last Price: 11.32
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Negative
• MACD: Positive
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For WEN, the sentiment is Neutral. The current price of 11.32 is above the 20-day moving average (MA) of 11.17, below the 50-day MA of 11.43, and below the 200-day MA of 14.50, indicating a neutral trend. The MACD of -0.25 indicates Positive momentum. The RSI at 52.54 is Neutral, neither overbought nor oversold. The STOCH value of 36.23 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Neutral sentiment for WEN.

Wendy's Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
DRI	80 Outperform	$24.49B	23.61	46.16%	3.41%	6.03%	4.08%
DPZ	74 Outperform	$16.33B	27.92	-14.74%	1.68%	3.65%	5.71%
MCD	70 Outperform	$213.92B	26.39	-216.57%	2.34%	-0.22%	-3.83%
WEN	68 Neutral	$2.08B	11.57	90.40%	7.86%	2.18%	-5.15%
YUM	67 Neutral	$41.29B	29.61	-19.43%	1.87%	10.09%	-11.50%
WING	66 Neutral	$8.95B	53.82	-16.09%	0.34%	30.98%	112.65%
Sector *	57 Neutral	HK$26.32B	4.03	-2.03%	5.52%	-0.23%	-68.02%

Wendy's Corporate Events

Wendy’s Appoints Pete Suerken as U.S. President

On July 22, 2025, Wendy’s announced the appointment of Pete Suerken as President, U.S., succeeding Abigail Pringle, who will depart the company after a transition period. Suerken, who has a strong background in supply chain management and innovation, is expected to drive profitability and growth for Wendy’s U.S. operations. This leadership change aims to enhance Wendy’s operational excellence and strategic priorities, benefiting franchisees, employees, and shareholders.

The most recent analyst rating on (WEN) stock is a Hold with a $18.00 price target. To see the full list of analyst forecasts on Wendy’s stock, see the WEN Stock Forecast page.

Wendy’s CEO Resignation and Interim Leadership Change

On July 1, 2025, Kirk Tanner announced his resignation as President and CEO of Wendy’s to join The Hershey Company, effective July 18, 2025. Ken Cook, the current CFO, will serve as Interim CEO while continuing his CFO role. The Board has initiated a search for a permanent CEO. Additionally, Bradley G. Peltz was elected to the Board, replacing Matthew H. Peltz, who resigned to focus on other commitments. These leadership changes are part of Wendy’s strategic plan to continue its growth and enhance its market position.

The most recent analyst rating on (WEN) stock is a Hold with a $18.00 price target. To see the full list of analyst forecasts on Wendy’s stock, see the WEN Stock Forecast page.

Wendy’s Stockholders Approve Executive Compensation

On May 21, 2025, Wendy’s held its Annual Meeting of Stockholders where all ten director nominees were elected, and Deloitte & Touche LLP was ratified as the independent accounting firm for 2025. Additionally, an advisory resolution on executive compensation was approved, while stockholder proposals on emissions reduction, worker-driven social responsibility, and single-use plastics were not approved.

The most recent analyst rating on (WEN) stock is a Hold with a $18.00 price target. To see the full list of analyst forecasts on Wendy’s stock, see the WEN Stock Forecast page.