Wendy's (WEN)
NASDAQ:WEN
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Wendy's
(NASDAQ:WEN)
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Rating:57Neutral
Price Target:
$7.50
▲(5.04% Upside)
Action:ReiteratedDate:02/20/26
The score is held back primarily by elevated balance-sheet risk and weakening recent fundamentals (slowing growth into a 2025 revenue decline) alongside mixed near-term guidance with U.S. sales pressure and optimization-related EBITDA drag. This is partly offset by strong and consistent free-cash-flow generation and an attractive valuation (low P/E and high dividend yield), while technicals remain neutral-to-weak versus longer-term averages.
Positive Factors
Cash generation
Wendy’s consistent operating cash flow and positive free cash flow provide durable internal funding for dividends, buybacks, and reinvestment in operations and digital. That recurring cash generation supports deleveraging and turnaround spending even if U.S. sales recover gradually, preserving flexibility.
Negative Factors
High leverage
Very elevated leverage with a compressed equity base reduces financial flexibility and increases refinancing and interest-rate risk. If operating recovery stalls, high debt limits the company’s ability to invest, absorb shocks, or accelerate deleveraging without cutting dividends or capital returns.
Read all positive and negative factors
Positive Factors
Negative Factors
Cash generation
Wendy’s consistent operating cash flow and positive free cash flow provide durable internal funding for dividends, buybacks, and reinvestment in operations and digital. That recurring cash generation supports deleveraging and turnaround spending even if U.S. sales recover gradually, preserving flexibility.
Read all positive factors
Wendy's (WEN) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$1.36B
Dividend Yield8.15%
Average Volume (3M)10.34M
Price to Earnings (P/E)9.8
Beta (1Y)0.43
Revenue Growth-0.21%
EPS Growth0.16%
CountryUS
Employees4,833
SectorConsumer Cyclical
Sector Strength84
IndustryRestaurants
Share Statistics
EPS (TTM)0.16
Shares Outstanding190,360,550
10 Day Avg. Volume9,757,606
30 Day Avg. Volume10,342,733
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 Cap3.83
Enterprise Value/Revenue2.39
Enterprise Value/Gross Profit8.80
Enterprise Value/Ebitda10.64
Forecast
1Y Price Target
$7.72Price Target Upside8.12% Upside
Rating ConsensusHold
Number of Analyst Covering20
EPS Forecast (FY)0.58
Revenue Forecast (FY)$2.20B
Wendy's Business Overview & Revenue Model
Company Description
The Wendy's Company, together with its subsidiaries, operates as a quick-service restaurant company. It operates through three segments: Wendy's U.S., Wendy's International, and Global Real Estate & Development. The company is involved in operatin...
How the Company Makes Money
Wendy’s makes money primarily through a franchised restaurant model supplemented by revenue from company-operated restaurants. A large portion of revenue is generated from franchise royalties, typically calculated as a percentage of sales from fra...
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 Earnings Call Summary
Earnings Call Date:Feb 13, 2026
(Q4-2025)
| % Change Since: |
Next Earnings Date:May 13, 2026
Earnings Call Sentiment Neutral
The call presented a mixed picture: strong, repeatable international growth, solid cash generation and a clear, multi‑pronged turnaround plan (Project Fresh) are notable positives. However, material U.S. sales declines (Q4 U.S. comps down double digits), margin pressure from traffic and inflation, and near-term earnings/headwinds from system optimization and weather create meaningful short-term challenges. Management emphasized active remediation (menu, marketing, operations, store optimization) and provided conservative 2026 guidance reflecting a rebuilding year.Positive Updates
International Growth and Expansion
International system-wide sales grew 6.2% in Q4 and 8.1% for full-year 2025; 159 new international restaurant openings in 2025 (59 in Q4) and 121 net new restaurants (net unit growth >9%); expanded from 31 to 38 international markets and secured development agreements for 338 new restaurants, with similar net new unit guidance for 2026.
Negative Updates
Significant U.S. Sales Declines
Global system-wide sales declined 8.3% in Q4 (constant currency) driven by U.S. weakness; U.S. same-restaurant sales declined 11.3% in Q4 and full-year global system-wide sales declined 3.5% for 2025, highlighting meaningful deterioration in the U.S. business.
Read all updates
Q4-2025 Updates
Positive
Negative
International Growth and Expansion
International system-wide sales grew 6.2% in Q4 and 8.1% for full-year 2025; 159 new international restaurant openings in 2025 (59 in Q4) and 121 net new restaurants (net unit growth >9%); expanded from 31 to 38 international markets and secured development agreements for 338 new restaurants, with similar net new unit guidance for 2026.
Read all positive updates
Company Guidance
Wendy’s 2026 guidance calls for global system‑wide sales to be approximately flat year‑over‑year (with a ~2% benefit from the 53rd week and ~2% from base improvements and international growth, offset by ~4% from system optimization), U.S. same‑restaurant sales expected to improve sequentially through the year, and roughly the same number of international net new units as 2025 (which delivered 121 net new restaurants). Financial targets include adjusted EBITDA of $460–480 million, adjusted EPS of $0.56–0.60, free cash flow of $190–205 million, U.S. company‑operated restaurant margin ~13% ±50 bps (assuming ~4% labor inflation and ~4% commodity inflation), G&A ~ $295 million, interest expense ~ $140 million, an effective tax rate of ~30%, and capital expenditures/build‑to‑suit of $120–130 million (after reducing build‑to‑suit spend by ~$20 million). Project Fresh actions include closing ~5–6% of U.S. restaurants (28 closed in Q4 with the remainder in H1), an expected ~$15–20 million drag on adjusted EBITDA from system optimization, a target net leverage range of 3.5–5.0x (expecting to remain near the top end), year‑end cash of $340 million, a $0.14 quarterly dividend, and roughly $35 million remaining on the current share repurchase authorization.Wendy's Financial Statement Overview
Summary
Income Statement
67
Positive
Balance Sheet
28
Negative
Cash Flow
72
Positive
| Breakdown | Dec 2025 | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 |
|---|---|---|---|---|---|
Income Statement | |||||
| Total Revenue | 2.18B | 2.25B | 2.18B | 2.10B | 1.90B |
| Gross Profit | 585.00M | 790.01M | 776.47M | 720.76M | 536.66M |
| EBITDA | 524.58M | 554.23M | 552.05M | 501.63M | 475.30M |
| Net Income | 165.07M | 194.36M | 204.44M | 177.37M | 200.39M |
Balance Sheet | |||||
| Total Assets | 4.96B | 5.03B | 5.18B | 5.50B | 5.10B |
| Cash, Cash Equivalents and Short-Term Investments | 300.83M | 450.51M | 516.04M | 745.89M | 249.44M |
| Total Debt | 4.15B | 4.09B | 4.14B | 4.28B | 3.86B |
| Total Liabilities | 4.84B | 4.78B | 4.87B | 5.03B | 4.66B |
| Stockholders Equity | 117.38M | 259.35M | 309.78M | 465.72M | 436.40M |
Cash Flow | |||||
| Free Cash Flow | 242.62M | 260.92M | 260.39M | 174.36M | 267.79M |
| Operating Cash Flow | 344.54M | 355.31M | 345.42M | 259.90M | 345.77M |
| Investing Cash Flow | -150.83M | -129.31M | -86.55M | -77.78M | -154.67M |
| Financing Cash Flow | -343.99M | -303.10M | -504.30M | 288.67M | -242.74M |
Wendy's Technical Analysis
Negative
7.14
Price Trends
7.58
Negative
7.90
Negative
8.83
Negative
Market Momentum
-0.14
Negative
45.23
Neutral
53.62
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For WEN, the sentiment is Negative. The current price of 7.14 is below the 20-day moving average (MA) of 7.21, below the 50-day MA of 7.58, and below the 200-day MA of 8.83, indicating a bearish trend. The MACD of -0.14 indicates Negative momentum. The RSI at 45.23 is Neutral, neither overbought nor oversold. The STOCH value of 53.62 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative 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 1 New Risks
1.
We may not be successful in implementing important strategic initiatives (including Project Fresh, our comprehensive strategic plan), effectively managing or maintaining growth and market share across our dayparts or executing strategic transactions, any of which may have an adverse impact on our business, results of operations and financial condition. Q4, 2025
Wendy's Peers Comparison
UnderperformOutperform
Sector (61)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
69 Neutral | $2.81B | 15.71 | 37.06% | 2.11% | 4.90% | 27.14% | |
67 Neutral | $12.19B | 23.81 | -15.28% | 1.63% | 3.92% | 4.98% | |
61 Neutral | $18.38B | 12.79 | -2.54% | 3.03% | 1.52% | -15.83% | |
61 Neutral | $4.57B | 41.12 | -24.54% | 0.45% | 15.56% | 79.02% | |
57 Neutral | $1.36B | 9.79 | 140.58% | 8.15% | -0.21% | 0.16% | |
49 Neutral | $209.40M | 2.44 | 7.30% | 9.34% | -6.75% | -118.94% | |
48 Neutral | $1.09B | 42.31 | -6.99% | 4.72% | -0.64% | -60.71% |
* Consumer Cyclical Sector Average
WEN
Wendy's
7.14
-6.73
-48.52%
DPZ
Domino's Pizza
362.53
-96.53
-21.03%
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PZZA
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33.12
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-15.00%
CAKE
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56.32
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13.81%
WING
Wingstop
166.31
-53.10
-24.20%
Wendy's Corporate Events
Business Operations and StrategyFinancial DisclosuresRegulatory Filings and Compliance
Wendy’s Responds to Trian, Reaffirms Project Fresh Strategy
Positive
Feb 18, 2026
On February 18, 2026, The Wendy’s Company issued a statement responding to an amended Schedule 13D filing by Trian Fund Management and its affiliates, signaling active engagement with a key shareholder. The company said its board regularly r...
Business Operations and StrategyExecutive/Board ChangesFinancial Disclosures
Wendy’s advances CEO search amid leadership transition
Positive
Jan 22, 2026
On October 9, 2025, The Wendy’s Company announced that its Board of Directors is continuing to advance a comprehensive process to select a permanent Chief Executive Officer, supported by a global executive search firm and considering a stron...
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.