Wendy's (WEN) AI Stock Analysis

• Market Cap: $1.46B
• Dividend Yield: 8.15%
• Average Volume (3M): 9.31M
• Price to Earnings (P/E): 9.0
• Beta (1Y): 0.42
• Revenue Growth: -0.21%
• EPS Growth: 0.16%
• Country: US
• Employees: 4,833
• Sector: Consumer Cyclical
• Sector Strength: 84
• Industry: Restaurants
• EPS (TTM): 0.16
• Shares Outstanding: 190,360,550
• 10 Day Avg. Volume: 12,215,798
• 30 Day Avg. Volume: 9,311,081
• PEG Ratio: -0.93
• Price to Book (P/B): 13.77
• Price to Sales (P/S): 0.74
• P/FCF Ratio: 6.66
• Enterprise Value/Market Cap: 3.64
• Enterprise Value/Revenue: 2.44
• Enterprise Value/Gross Profit: 8.97
• Enterprise Value/Ebitda: 10.84
• 1Y Price Target: $7.92
• Price Target Upside: 3.39% Upside
• Rating Consensus: Hold
• Number of Analyst Covering: 22
• EPS Forecast (FY): 0.6
• Revenue Forecast (FY): $2.21B

• Rating: 57 Neutral
• Price Target: $8.50 ▲(10.97% Upside)
• Action: Reiterated Date: 02/20/26
• Date: Action: Reiterated 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

Consistent cash generation

Sustained operating cash flow and positive free cash flow provide durable internal funding for capex, Project Fresh investments, dividends and buybacks. Reliable cash conversion (FCF ~3/4 of net income historically) supports capital allocation even with cyclical revenue swings.

Rapid international expansion

High international unit growth and development agreements for hundreds of restaurants diversify revenue beyond the U.S., driving structural growth at a faster clip. A larger global footprint reduces single‑market concentration risk and creates long‑term royalty and rental revenue streams.

Franchise business model and category margins

A royalty‑driven franchised model yields scalable, cash‑oriented revenues with relatively stable category margins. Company‑operated outperformance validates operational playbook, supporting steady margin contribution from company units and long‑term franchise cash flow resilience.

Negative Factors

Elevated leverage and thin equity

Very high leverage and a compressed equity base materially reduce financial flexibility. Interest and principal servicing limits the balance sheet's ability to absorb prolonged U.S. weakness, constrains opportunistic investments, and raises refinancing and covenant risk during downturns.

Severe U.S. sales weakness and closures

A sharp U.S. comp decline signals structural demand loss in the core market. Coupled with Project Fresh closures (5–6% of U.S. units), this reduces systemwide revenue and pressures franchisee economics, creating a multi‑quarter recovery path and sustained near‑term profit headwinds.

Margin pressure, rising G&A and constrained capital

Commodity and labor inflation plus increased G&A and sizable interest expense compress margins long term. With leverage near the top of target, capital allocation choices (dividend, repurchases, reinvestment) are constrained and earnings recovery must outpace cost and financing 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 restaurant locations. The company operates on a franchise model, where a significant portion of its income comes from franchise fees, royalties, and rental income from franchisees. The franchisees pay Wendy's a percentage of their sales, which can provide a stable revenue stream. Additionally, Wendy's invests in marketing and promotional campaigns to drive sales and brand loyalty. Partnerships with suppliers ensure competitive pricing for ingredients, contributing to profit margins. The company also engages in limited-time offers and promotions to attract customers, further boosting revenue during specific periods.

Wendy's Financial Statement Overview

Summary

Durable free-cash-flow generation and solid category-level profitability support the profile, but financial risk is elevated: revenue has slowed into a 2025 decline and earnings have stepped down, while leverage is extremely high with a thin equity buffer, limiting flexibility if operations weaken.

Income Statement

Revenue growth has slowed materially, moving from mid-to-high single-digit gains in 2022–2023 to low growth in 2024 and a decline in 2025 (annual revenue down ~1.4%). Profitability remains solid for the category (2024 operating and net margins in the mid-to-high single digits), but margins have drifted lower from 2022–2023 levels and net income stepped down in 2024 and again in 2025. Overall: resilient earnings power, but the recent top-line and profit trajectory is weakening.

Balance Sheet

Leverage is the key constraint. Total debt is ~4.1B versus a very small equity base (debt-to-equity was ~15.8x in 2024 and rose sharply versus prior years as equity compressed). Total assets are relatively stable, but the shrinking equity cushion increases financial risk and reduces flexibility if operating results soften. Returns on equity appear very high, but are heavily influenced by the low equity base rather than purely improving fundamentals.

Cash Flow

Cash generation is a relative strength: operating cash flow has been steady around the mid-300M range in recent years, and free cash flow is consistently positive (~261M in 2024 and ~243M in 2025). Free cash flow generally tracks earnings reasonably well (free cash flow around three-quarters of net income in 2023–2024), supporting reinvestment and shareholder returns. The main watch-out is that cash flow growth is not consistent year-to-year and operating cash flow has not fully covered accounting earnings in some periods (below 1x in 2023–2024).

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

• Technical Analysis Sentiment: Negative
• Last Price: 7.66
• 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 7.66 is below the 20-day moving average (MA) of 7.78, below the 50-day MA of 8.09, and below the 200-day MA of 9.35, indicating a bearish trend. The MACD of -0.11 indicates Negative momentum. The RSI at 46.30 is Neutral, neither overbought nor oversold. The STOCH value of 55.56 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	69 Neutral	$3.23B	21.19	33.74%	2.11%	4.90%	27.14%
DPZ	67 Neutral	$13.54B	22.90	―	1.63%	3.92%	4.98%
WING	62 Neutral	$7.13B	41.81	―	0.45%	15.56%	79.02%
Sector *	61 Neutral	$18.38B	12.79	-2.54%	3.03%	1.52%	-15.83%
WEN	57 Neutral	$1.46B	9.00	87.63%	8.15%	-0.21%	0.16%
JACK	45 Neutral	$322.09M	-4.60	―	9.34%	-6.75%	-118.94%
PZZA	45 Neutral	$1.03B	34.93	―	4.72%	-0.64%	-60.71%

Wendy's Corporate Events

Wendy’s Responds to Trian, Reaffirms Project Fresh Strategy

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 reviews strategic priorities to maximize shareholder value and pledged to carefully evaluate any formal proposal from Trian in line with its fiduciary duties.

Wendy’s reiterated that it is pressing ahead with its Project Fresh turnaround plan, which was highlighted on its recent fourth-quarter 2025 earnings call. The initiative aims to strengthen the U.S. business while sustaining robust international growth, and management expressed confidence that its brand, franchisee base and strategy position the company for long-term success.

The most recent analyst rating on (WEN) stock is a Hold with a $8.00 price target. To see the full list of analyst forecasts on Wendy’s stock, see the WEN Stock Forecast page.

Wendy’s advances CEO search amid leadership transition

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 strong slate of internal and external candidates. Chairman Art Winkleblack emphasized the Board’s goal of finding a leader who can sustain the company’s turnaround plans and next phase of growth, while highlighting confidence in the current management team, including Interim CEO Ken Cook; the company also confirmed it will report fourth-quarter and full-year 2025 results on February 13, 2026, underscoring a focus on continuity and execution during the leadership transition.

The most recent analyst rating on (WEN) stock is a Sell with a $8.00 price target. To see the full list of analyst forecasts on Wendy’s stock, see the WEN Stock Forecast page.

Wendy’s Completes $450 Million Financing Transaction

On December 15, 2025, Wendy’s Funding, LLC, a subsidiary of The Wendy’s Company, completed a financing transaction by issuing $450 million in Series 2025-1 5.422% Fixed Rate Senior Secured Notes. This securitization transaction involves domestic and certain foreign revenue-generating assets, primarily franchise-related agreements, real estate, and intellectual property, which are held by the Master Issuer and its subsidiaries acting as guarantors. The proceeds from this issuance will be used to repay existing debt, cover transaction fees, and support general corporate purposes, including growth initiatives and shareholder returns. The transaction is expected to provide Wendy’s with greater financial flexibility and potentially improve its market positioning.

The most recent analyst rating on (WEN) stock is a Hold with a $9.00 price target. To see the full list of analyst forecasts on Wendy’s stock, see the WEN Stock Forecast page.

Wendy’s Enters Agreement for $450M Note Issuance

On November 19, 2025, Wendy’s and its subsidiaries entered into a Purchase Agreement with Barclays Capital Inc. to issue and sell $450 million of Series 2025-1 5.422% Fixed Rate Senior Secured Notes in a private securitization transaction. The closing of this sale is expected by the end of the fourth quarter of 2025, subject to certain conditions, and aims to strengthen Wendy’s financial positioning while indemnifying initial purchasers against specific liabilities.

The most recent analyst rating on (WEN) stock is a Hold with a $9.00 price target. To see the full list of analyst forecasts on Wendy’s stock, see the WEN Stock Forecast page.