Wendy's (WEN) AI Stock Analysis

• Market Cap: $1.73B
• Dividend Yield: 8.83%
• Average Volume (3M): 5.91M
• Price to Earnings (P/E): 9.5
• Beta (1Y): 0.42
• Revenue Growth: 1.31%
• EPS Growth: -1.46%
• Country: US
• Employees: 4,833
• Sector: Consumer Cyclical
• Sector Strength: 84
• Industry: Restaurants
• EPS (TTM): 0.24
• Shares Outstanding: 190,565,100
• 10 Day Avg. Volume: 6,527,817
• 30 Day Avg. Volume: 5,913,735
• PEG Ratio: -5.58
• Price to Book (P/B): 12.81
• Price to Sales (P/S): 1.48
• P/FCF Ratio: 12.73
• Enterprise Value/Market Cap: 3.40
• Enterprise Value/Revenue: 2.65
• Enterprise Value/Gross Profit: 7.41
• Enterprise Value/Ebitda: 11.33
• 1Y Price Target: $10.31
• Price Target Upside: 16.76% Upside
• Rating Consensus: Hold
• Number of Analyst Covering: 21
• EPS Forecast (FY): N/A
• Revenue Forecast (FY): N/A

• Rating: 59 Neutral
• Price Target: $9.50 ▲(7.59% Upside)

Wendy's overall stock score reflects a challenging environment. The most significant factor is the mixed financial performance, with stable profitability but declining revenue growth and high leverage. Technical analysis indicates bearish momentum, while valuation suggests potential undervaluation. The earnings call underscores challenges in the U.S. market, impacting sentiment.

Positive Factors

International Growth

Strong international growth indicates successful global expansion and strategic investments, which can enhance long-term revenue streams and offset domestic challenges.

Leadership Change

The appointment of a new U.S. President with a strong background in supply chain management and innovation is likely to enhance operational efficiency and strategic execution, supporting long-term growth.

Free Cash Flow Generation

Strong free cash flow generation provides financial flexibility to invest in growth initiatives, pay down debt, and return capital to shareholders, supporting long-term stability.

Negative Factors

U.S. Sales Decline

Declining U.S. sales indicate challenges in the domestic market, which could impact overall revenue growth and necessitate strategic adjustments to regain market share.

High Leverage

High leverage can strain financial resources, limit strategic flexibility, and increase vulnerability to economic downturns, potentially impacting long-term financial health.

Commodity Cost Pressures

Rising commodity costs can pressure profit margins, requiring effective cost management strategies to maintain profitability and competitive pricing in the long term.

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 operating, developing, and franchising a system of quick-service restaurants specializing in hamburger sandwiches. As of January 2, 2022, it operated approximately 403 company-operated restaurants; 5,535 franchised restaurants in the United States; and 1,006 franchised restaurants internationally. The company also owns and leases real estate properties. It owns 485 and leases 1,235 properties, which are leased or subleased to franchisees. The company was formerly known as Wendy's/Arby's Group, Inc. and changed its name to The Wendy's Company in July 2011. The Wendy's Company was founded in 1969 and is headquartered in Dublin, Ohio.

How the Company Makes Money

Wendy's generates revenue primarily through the sale of food and beverages from its company-operated and franchised restaurants. The revenue model consists of two main streams: company-operated restaurant sales and franchise fees. Company-operated locations contribute directly to revenue through sales of menu items, while franchised locations pay Wendy's a percentage of their sales as royalties, along with initial franchise fees and ongoing service fees. Additionally, Wendy's benefits from strategic partnerships, such as collaborations with third-party delivery services, enhancing customer reach and convenience. Marketing initiatives and promotional campaigns also play a vital role in driving sales and strengthening brand loyalty, thereby contributing to overall revenue growth.

Wendy's Financial Statement Overview

Summary

Wendy's financial performance is mixed. While profitability margins are stable, revenue growth has declined significantly by 43.8%. The balance sheet shows high leverage, indicating financial risk, but cash flow remains strong with a 4.41% growth in free cash flow.

Income Statement

Wendy's income statement shows a mixed performance. The TTM data indicates a decline in revenue growth rate by 43.8%, which is concerning. However, the company maintains a stable net profit margin of 8.63% and a reasonable EBIT margin of 16.37%. The gross profit margin has decreased slightly from previous periods, indicating potential cost pressures. Overall, while profitability metrics remain stable, the significant drop in revenue growth is a key area of concern.

Balance Sheet

The balance sheet reveals high leverage with a debt-to-equity ratio of 36.21 in the TTM period, which is significantly higher than previous years, indicating increased financial risk. Return on equity is low at 1.01%, reflecting limited returns on shareholder investment. The equity ratio is also low, suggesting a heavy reliance on debt financing. These factors highlight potential financial instability and risk.

Cash Flow

Cash flow analysis shows a positive trend with a 4.41% growth in free cash flow in the TTM period. The operating cash flow to net income ratio is 0.86, indicating good cash generation relative to net income. The free cash flow to net income ratio of 0.72 suggests that the company is generating sufficient free cash flow to cover its net income. Despite the positive cash flow metrics, the overall financial health is impacted by high leverage.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	2.23B	2.25B	2.18B	2.10B	1.90B	1.73B
Gross Profit	794.97M	790.01M	776.47M	720.76M	536.66M	621.48M
EBITDA	519.71M	554.23M	552.05M	501.63M	475.30M	403.31M
Net Income	192.06M	194.36M	204.44M	177.37M	200.39M	117.83M
Balance Sheet
Total Assets	4.89B	5.03B	5.18B	5.50B	5.10B	5.04B
Cash, Cash Equivalents and Short-Term Investments	281.23M	450.51M	516.04M	745.89M	249.44M	306.99M
Total Debt	4.09B	4.09B	4.14B	4.28B	3.86B	3.68B
Total Liabilities	4.78B	4.78B	4.87B	5.03B	4.66B	4.49B
Stockholders Equity	112.89M	259.35M	309.78M	465.72M	436.40M	549.60M
Cash Flow
Free Cash Flow	256.88M	260.92M	260.39M	174.36M	267.79M	215.39M
Operating Cash Flow	355.85M	355.31M	345.42M	259.90M	345.77M	284.36M
Investing Cash Flow	-137.61M	-129.31M	-86.55M	-77.78M	-154.67M	-68.25M
Financing Cash Flow	-413.40M	-303.10M	-504.30M	288.67M	-242.74M	-157.91M

Wendy's Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 8.83
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Negative
• MACD: Negative
• RSI: Neutral
• STOCH: 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 8.83 is below the 20-day moving average (MA) of 8.85, below the 50-day MA of 9.29, and below the 200-day MA of 11.57, indicating a bearish trend. The MACD of -0.14 indicates Negative momentum. The RSI at 46.42 is Neutral, neither overbought nor oversold. The STOCH value of 66.27 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for WEN.

Wendy's Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
CAKE	68 Neutral	$2.40B	14.64	39.14%	2.14%	4.90%	27.14%
Sector *	61 Neutral	$18.38B	12.79	-2.54%	3.03%	1.52%	-15.83%
WEN	59 Neutral	$1.73B	9.48	99.35%	8.83%	1.31%	-1.46%
DPZ	58 Neutral	$13.53B	23.40	―	1.68%	3.92%	4.98%
WING	58 Neutral	$6.59B	38.73	―	0.47%	15.56%	79.02%
PZZA	55 Neutral	$1.42B	19.16	―	3.62%	-1.46%	8.10%
JACK	47 Neutral	$315.72M	―	―	10.27%	-6.66%	-71.87%

Wendy's Corporate Events

Wendy’s Launches Project Fresh to Revitalize Brand

On October 9, 2025, Wendy’s announced the launch of Project Fresh, a strategic plan aimed at revitalizing the brand and enhancing value creation. The initiative focuses on strengthening brand positioning, optimizing the U.S. restaurant system, transforming operations for efficiency, and reallocating capital to drive growth. These efforts are expected to redefine Wendy’s operations and enhance shareholder value, positioning the company as an industry leader.

The most recent analyst rating on (WEN) stock is a Hold with a $11.00 price target. To see the full list of analyst forecasts on Wendy’s stock, see the WEN Stock Forecast page.

Wendy’s Earnings Call: Mixed Sentiment and Strategic Focus

The recent earnings call for Wendy’s Company presented a mixed sentiment, reflecting both achievements and challenges faced by the company. While the international segment exhibited robust growth and product innovations like the Frosty platform were successful, the U.S. market posed significant challenges. Sales declines and a competitive environment led to a downward revision in the company’s outlook. Nonetheless, Wendy’s is focusing on improving execution and leveraging new data capabilities to address these issues in the future.

Wendy’s Reports Mixed Q2 2025 Results Amid Global Expansion

The Wendy’s Company, a prominent player in the fast-food industry, is known for its fresh, made-to-order hamburgers and a variety of other menu items, operating over 7,000 restaurants worldwide. In its latest earnings report for the second quarter of 2025, Wendy’s highlighted a global systemwide sales figure of $3.7 billion, marking a slight decline of 1.8%. However, the company saw a promising 8.7% growth in international sales, indicating strong performance outside the U.S.

Wendy’s Approves Stock-Based Retention Awards for Executives

On July 24, 2025, Wendy’s Board of Directors approved stock-based retention awards for its executive leadership team, excluding Interim CEO Ken Cook, to ensure smooth leadership transition and continuity. These awards, effective August 12, 2025, include restricted stock units and stock options for key executives like E.J. Wunsch and Lindsay J. Radkoski, vesting over two years, contingent on continued employment.

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.