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Wendy's
(NASDAQ:WEN)
Select Model
Select Model
Rating:58Neutral
Price Target:
$7.50
▲(7.91% Upside)
Action:Reiterated
Date:06/30/26
The score is held back primarily by financial risk and operating pressure—especially the heavily levered balance sheet and the sharp TTM revenue decline—despite still-solid margins and free cash flow. Valuation is a key offset (low P/E and high dividend yield). The earnings call supports a mid-range view: guidance was maintained and international/digital initiatives are progressing, but U.S. traffic weakness, inflation, and optimization headwinds keep near-term visibility constrained.
Positive Factors
Franchise-led Business Model
Wendy's asset-light franchised model produces recurring royalty and fee revenue and reduces capital intensity versus pure company-operated peers. This structural mix supports predictable cash flow, scalability of unit growth, and alignment with franchisees for multi-year margin and cash conversion stability.
Negative Factors
High Financial Leverage
Extremely high leverage materially reduces financial flexibility and amplifies downside risk if sales or cash flow deteriorate. Servicing debt and meeting net-leverage targets constrains capital allocation, limits buybacks, and makes sustained investment in remodels or marketing more costly over the next several quarters.
Read all positive and negative factors
Positive Factors
Negative Factors
Franchise-led Business Model
Wendy's asset-light franchised model produces recurring royalty and fee revenue and reduces capital intensity versus pure company-operated peers. This structural mix supports predictable cash flow, scalability of unit growth, and alignment with franchisees for multi-year margin and cash conversion stability.
Read all positive factors
Wendy's Key Performance Indicators (KPIs)
Any
Total Stores
Indicates the total number of Wendy's locations worldwide, reflecting the brand's scale, market reach, and potential for revenue generation.
Indicates the total number of Wendy's locations worldwide, reflecting the brand's scale, market reach, and potential for revenue generation.
Data provided by:
The Fly
The FlyWendy's (WEN) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$1.45B
Dividend Yield8.15%
Average Volume (3M)24.35M
Price to Earnings (P/E)9.8
Beta (1Y)0.53
Revenue Growth-1.84%
EPS Growth-17.48%
CountryUS
Employees14,900
SectorConsumer Cyclical
Sector Strength84
IndustryRestaurants
Share Statistics
EPS (TTM)0.78
Shares Outstanding190,480,640
10 Day Avg. Volume26,520,191
30 Day Avg. Volume24,349,757
Financial Highlights & Ratios
PEG Ratio-0.93
Price to Book (P/B)13.77
Price to Sales (P/S)0.74
P/FCF Ratio6.66
Enterprise Value/Market Cap3.45
Enterprise Value/Revenue2.28
Enterprise Value/Gross Profit8.58
Enterprise Value/Ebitda9.77
Forecast
1Y Price Target
$7.09Price Target Upside2.03% Upside
Rating ConsensusHold
Number of Analyst Covering17
EPS Forecast (FY)0.57
Revenue Forecast (FY)$2.20B
Wendy's Business Overview & Revenue Model
Company Description
The Wendy's Company, together with its subsidiaries, engages in the operation, development, and franchising of a system of quick-service restaurants in the United States and internationally. The company operates through the Wendy’s U.S., Wendy’s I...
How the Company Makes Money
Wendy’s makes money primarily through a mixed model of franchising and company-operated restaurant sales. (1) Franchise-related revenue: A significant portion of Wendy’s earnings comes from its franchised system, where independent restaurant opera...
Wendy's Earnings Call Summary
Earnings Call Date:May 08, 2026
(Q1-2026)
| % Change Since: |
Next Earnings Date:Aug 07, 2026
Earnings Call Sentiment Neutral
The call reflected a balanced narrative: clear operational and international growth progress (notably the China agreement, digital growth, and operational improvements) provided positive momentum and early proof points for the Project Fresh turnaround. However, meaningful near-term top-line weakness in the U.S., margin pressure from commodity and labor inflation, franchisee profitability declines, and a planned system-optimization headwind temper the outlook. Management maintained guidance and emphasized sequencing of initiatives that should drive sequential improvement, but significant near-term recovery is still required.Positive Updates
International Growth and Major China Agreement
International system-wide sales grew 6% in Q1 and Wendy's signed a franchise agreement to build up to 1,000 restaurants in China over the next 10 years — the largest development agreement in company history, strengthening the international development pipeline.
Negative Updates
Decline in Global and U.S. Sales
Global system-wide sales declined 5.5% in Q1 on a constant currency basis; U.S. same-restaurant sales declined 7.8%, driven primarily by traffic weakness.
Read all updates
Q1-2026 Updates
Positive
Negative
International Growth and Major China Agreement
International system-wide sales grew 6% in Q1 and Wendy's signed a franchise agreement to build up to 1,000 restaurants in China over the next 10 years — the largest development agreement in company history, strengthening the international development pipeline.
Read all positive updates
Company Guidance
The company reiterated full‑year 2026 guidance calling for global system‑wide sales to be approximately flat (with a mid‑single‑digit decline expected in Q2 and a return to growth in the back half, aided by a 53rd week), adjusted EBITDA of $460–$480 million, adjusted EPS of $0.56–$0.60, U.S. company‑operated restaurant margin of 13% ±50 bps (assuming ~4% labor inflation and ~4% commodity cost inflation), and G&A of roughly $295 million; capital expenditures (including Build‑to‑Suit) are $120–$130 million with free cash flow forecast at $190–$205 million. They flagged a $15–$20 million net revenue headwind from system optimization (affecting ~5–6% of the U.S. system) and said they expect to remain near the top end of their net‑leverage target range of 3.5x–5x (net leverage was 4.9x at quarter‑end with $338 million cash). Quarterly and operational metrics disclosed included Q1 global system‑wide sales down 5.5% (U.S. same‑restaurant sales down 7.8%, International system‑wide sales +6%), Q1 adjusted EBITDA $111.3 million, Q1 adjusted EPS $0.12, Q1 free cash flow $36.5 million (down $31.5 million YoY), Q1 CapEx $16.5 million (≈$5.4M technology, $9.1M restaurant development), company‑operated margins: global 10.8% and U.S. 11.4%, U.S. digital sales +8.4% with 22.7% digital mix, and franchisee 2025 performance: U.S. avg net sales ≈‑6% with avg EBITDA margin down 270 bps to 9.3% (Canada: +1% net sales, EBITDA margin down 160 bps to 12.6%); dividend was maintained at $0.14/share and ~$35 million of repurchase authorization remains.Wendy's Financial Statement Overview
Summary
Income Statement
62
Positive
Balance Sheet
22
Negative
Cash Flow
58
Neutral
| Breakdown | TTM | Dec 2025 | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 |
|---|---|---|---|---|---|---|
Income Statement | ||||||
| Total Revenue | 2.19B | 2.18B | 2.25B | 2.18B | 2.10B | 1.90B |
| Gross Profit | 581.79M | 585.00M | 790.01M | 776.47M | 720.76M | 536.66M |
| EBITDA | 511.08M | 524.58M | 554.23M | 552.05M | 501.63M | 475.30M |
| Net Income | 148.56M | 165.07M | 194.36M | 204.44M | 177.37M | 200.39M |
Balance Sheet | ||||||
| Total Assets | 4.92B | 4.96B | 5.03B | 5.18B | 5.50B | 5.10B |
| Cash, Cash Equivalents and Short-Term Investments | 447.18M | 300.83M | 450.51M | 516.04M | 745.89M | 249.44M |
| Total Debt | 4.12B | 4.15B | 4.09B | 4.14B | 4.28B | 3.86B |
| Total Liabilities | 4.81B | 4.84B | 4.78B | 4.87B | 5.03B | 4.66B |
| Stockholders Equity | 115.55M | 117.38M | 259.35M | 309.78M | 465.72M | 436.40M |
Cash Flow | ||||||
| Free Cash Flow | 222.39M | 242.62M | 260.92M | 260.39M | 174.36M | 267.79M |
| Operating Cash Flow | 318.52M | 344.54M | 355.31M | 345.42M | 259.90M | 345.77M |
| Investing Cash Flow | -143.01M | -150.83M | -129.31M | -86.55M | -77.78M | -154.67M |
| Financing Cash Flow | -205.15M | -343.99M | -303.10M | -504.30M | 288.67M | -242.74M |
Wendy's Technical Analysis
Neutral
6.95
Price Trends
7.28
Positive
7.15
Positive
7.64
Negative
Market Momentum
0.19
Positive
50.64
Neutral
12.29
Positive
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 6.95 is below the 20-day moving average (MA) of 7.44, below the 50-day MA of 7.28, and below the 200-day MA of 7.64, indicating a neutral trend. The MACD of 0.19 indicates Positive momentum. The RSI at 50.64 is Neutral, neither overbought nor oversold. The STOCH value of 12.29 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Neutral sentiment for WEN.
Wendy's Risk Analysis
Wendy's disclosed 33 risk factors in its most recent earnings report. Wendy's reported the most risks in the "Finance & Corporate" category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks
Wendy's Peers Comparison
UnderperformOutperform
Sector (61)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
67 Neutral | $3.90B | 23.73 | 38.34% | 2.11% | 5.14% | 8.17% | |
64 Neutral | $10.01B | 17.23 | -15.04% | 1.63% | 5.17% | -0.62% | |
62 Neutral | $4.30B | 38.37 | -15.30% | 0.45% | 8.96% | -32.63% | |
61 Neutral | $18.38B | 12.79 | -2.54% | 3.03% | 1.52% | -15.83% | |
58 Neutral | $1.45B | 9.75 | 130.59% | 8.15% | -1.84% | -17.48% | |
50 Neutral | $1.11B | 39.96 | -6.47% | 4.72% | -2.41% | -64.77% | |
48 Neutral | $289.35M | 3.42 | -3.80% | 9.34% | -17.16% | ― |
* Consumer Cyclical Sector Average
WEN
Wendy's
7.55
-2.76
-26.76%
DPZ
Domino's Pizza
299.46
-156.23
-34.28%
JACK
Jack In The Box
14.89
-7.86
-34.55%
PZZA
Papa John's International
33.49
-11.34
-25.30%
CAKE
Cheesecake Factory
82.76
19.26
30.33%
WING
Wingstop
153.29
-172.95
-53.01%
Wendy's Corporate Events
Business Operations and StrategyExecutive/Board Changes
Wendy’s Appoints Steve Cirulis as New CFO and CSO
Positive
Jun 23, 2026
On June 23, 2026, Wendy’s announced that industry veteran Steve Cirulis will become Chief Financial Officer and Chief Strategy Officer, succeeding Ken Cook, who has served as CFO since 2024 and will remain in an advisory role through July to...
Executive/Board Changes
Wendy’s Names Aaron Kale as New Chief Accounting Officer
Neutral
Jun 9, 2026
On June 4, 2026, Wendy’s Chief Accounting Officer Suzanne M. Thuerk notified the company of her intention to resign to pursue an opportunity outside the restaurant sector, though she will remain in a non-executive role until July 10, 2026 to...
Business Operations and StrategyShareholder Meetings
Wendy’s Shareholders Approve Equity Plan and Governance Changes
Positive
May 22, 2026
On May 20, 2026, Wendy’s stockholders approved an amendment to the company’s 2020 Omnibus Award Plan, adding 21 million shares of common stock available for equity-based compensation, a move that could expand its ability to attract and...
Business Operations and StrategyExecutive/Board Changes
Wendy’s Names Bob Wright New CEO and President
Positive
May 20, 2026
On May 17, 2026, The Wendy’s Company’s board appointed Robert D. “Bob” Wright as president and chief executive officer, effective May 21, 2026, with Wright also joining the board and serving on its Capital and Investment an...
Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.