Wendy's (WEN) AI Stock Analysis

• Market Cap: $2.24B
• Dividend Yield: 4.8%
• Average Volume (3M): 6.50M
• Price to Earnings (P/E): 12.4
• Beta (1Y): 0.25
• Revenue Growth: 2.18%
• EPS Growth: -5.15%
• Country: US
• Employees: 4,833
• Sector: Consumer Cyclical
• Sector Strength: 56
• Industry: Restaurants
• EPS (TTM): 0.20
• Shares Outstanding: 192,025,250
• 10 Day Avg. Volume: 8,479,089
• 30 Day Avg. Volume: 6,504,082
• PEG Ratio: -3.10
• Price to Book (P/B): 10.39
• Price to Sales (P/S): 0.00
• P/FCF Ratio: 27.74
• Enterprise Value/Market Cap: 3.74
• Enterprise Value/Revenue: 0.98
• Enterprise Value/Gross Profit: 12.51
• Enterprise Value/Ebitda: 3.93
• 1Y Price Target: $14.53
• Price Target Upside: 24.61% Upside
• Rating Consensus: Hold
• Number of Analyst Covering: 19

• Rating: 67 Neutral
• Price Target: $12.50 ▲(7.20%Upside)

Wendy's overall stock score is driven by stable financial performance and a fair valuation, but is tempered by technical analysis indicating potential bearish momentum and a cautious earnings outlook. The company's high leverage and challenges in the U.S. market are significant risks, while international growth and strategic initiatives provide some optimism.

Positive Factors

Investment potential

Wendy's current share price provides a value-oriented opportunity with significant upside to equity value and potential for FCF yield to improve.

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

Consumer pressures

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

Franchisee economics

Deteriorating franchisees economics may impact future unit growth due to reduced restaurant margins and increased franchisees fees.

Guidance reduction

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

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 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 exhibits consistent revenue growth and operational efficiency. However, high financial leverage and declining equity levels pose a risk. Stable cash flow generation is a positive, but the significant debt load raises concerns 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	TTM	Dec 2024	Dec 2023	Mar 2023	Mar 2022	Mar 2021
Income Statement
Total Revenue	1.93B	2.25B	2.18B	2.10B	1.90B	1.73B
Gross Profit	669.42M	790.01M	776.47M	720.76M	698.26M	621.48M
EBITDA	455.80M	554.23M	552.05M	535.55M	458.55M	416.91M
Net Income	191.60M	194.36M	204.44M	177.37M	200.39M	117.83M
Balance Sheet
Total Assets	4.92B	5.03B	5.18B	5.50B	5.10B	5.04B
Cash, Cash Equivalents and Short-Term Investments	335.26M	450.51M	516.04M	745.89M	249.44M	306.99M
Total Debt	4.08B	4.09B	4.14B	4.28B	3.86B	3.68B
Total Liabilities	4.79B	4.78B	4.87B	5.03B	4.66B	4.49B
Stockholders Equity	130.24M	259.35M	309.78M	465.72M	436.40M	549.60M
Cash Flow
Free Cash Flow	246.02M	260.92M	260.39M	174.36M	267.79M	215.39M
Operating Cash Flow	340.74M	355.31M	345.42M	259.90M	345.77M	284.36M
Investing Cash Flow	-129.98M	-129.31M	-86.55M	-77.78M	-154.67M	-68.25M
Financing Cash Flow	-409.79M	-303.10M	-504.30M	288.67M	-242.74M	-157.91M

Wendy's Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 11.66
• 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 11.66 is above the 20-day moving average (MA) of 11.64, below the 50-day MA of 11.81, and below the 200-day MA of 14.91, indicating a neutral trend. The MACD of -0.01 indicates Negative momentum. The RSI at 48.90 is Neutral, neither overbought nor oversold. The STOCH value of 34.50 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
DRI	80 Outperform	$25.67B	24.76	46.16%	2.55%	6.03%	4.08%
MCD	71 Outperform	$210.67B	25.99	-216.57%	2.40%	-0.22%	-3.83%
YUM	68 Neutral	$41.80B	29.98	-19.43%	1.89%	10.09%	-11.50%
WING	68 Neutral	$9.10B	54.74	-16.09%	0.33%	30.98%	112.65%
WEN	67 Neutral	$2.24B	12.44	90.40%	4.80%	2.18%	-5.15%
DPZ	63 Neutral	$15.55B	26.02	-14.74%	1.53%	4.28%	13.76%
Sector *	56 Neutral	HK$23.71B	3.90	-1.57%	6.72%	0.06%	-64.88%

Wendy's Corporate Events

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.