Wendy's (WEN) AI Stock Analysis

• Market Cap: $1.93B
• Dividend Yield: 8.44%
• Average Volume (3M): 7.47M
• Price to Earnings (P/E): 10.6
• Beta (1Y): 0.31
• Revenue Growth: 1.31%
• EPS Growth: -1.46%
• Country: US
• Employees: 4,833
• Sector: Consumer Cyclical
• Sector Strength: 75
• Industry: Restaurants
• EPS (TTM): 0.29
• Shares Outstanding: 190,565,100
• 10 Day Avg. Volume: 8,247,253
• 30 Day Avg. Volume: 7,468,661
• PEG Ratio: N/A
• Price to Book (P/B): N/A
• Price to Sales (P/S): N/A
• P/FCF Ratio: N/A
• Enterprise Value/Market Cap: 3.06
• Enterprise Value/Revenue: 2.65
• Enterprise Value/Gross Profit: 8.86
• Enterprise Value/Ebitda: 11.33
• 1Y Price Target: $11.86
• Price Target Upside: 13.93% Upside
• Rating Consensus: Hold
• Number of Analyst Covering: 19

• Rating: 60 Neutral
• Price Target: $11.00 ▲(5.67% Upside)

Wendy's overall stock score is 60, reflecting a combination of stable profitability and attractive valuation, offset by challenges in revenue growth and high leverage. Technical indicators suggest bearish momentum, while the earnings call highlighted mixed performance with strong international growth but U.S. market challenges. The recent leadership change is a positive step towards addressing these issues.

Positive Factors

Financial Performance

Valuation on lowered expectations protects further downside with a current 8-8.5% yield on estimated future free cash flow, suggesting some level of financial stability.

International Markets

International markets continue to be the bright spot, with international SWS growth at 8.7% and +1.8% SSS suggesting that the brand has the potential to penetrate in more geographies.

Management Initiatives

Management's effort to swiftly address the traffic declines with new menu innovation, including chicken tenders and beverages planned, is applauded.

Negative Factors

Advertising and Marketing Challenges

The unsuccessful 100 Days of Summer campaign spread the marketing budget too thinly and increased operational complexity for franchisees.

Competitive Pressure

Wendy's is facing competitive pressure from McDonald's, which is determined to take market share.

Market and Sales Performance

QTD trends appear to be slower with July down 5-6%, indicating potential for lower global system sales growth.

Wendy's Business Overview & Revenue Model

Company Description

Wendy's Company, commonly known as Wendy's, is a global fast-food restaurant chain headquartered in Dublin, Ohio. Established in 1969 by Dave Thomas, the company specializes in offering a diverse menu that includes fresh, never frozen beef hamburgers, chicken sandwiches, salads, and Frosty desserts. Wendy's operates primarily in the quick-service restaurant (QSR) sector and is known for its commitment to quality ingredients and innovative menu items. The company has a substantial presence in North America and has expanded into international markets, focusing on drive-thru service and digital ordering solutions.

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 demonstrates consistent revenue growth and operational efficiency, but high financial leverage and declining equity levels pose risks. Stable cash flow generation is a positive, yet the significant debt load is concerning 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	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	2.23B	2.25B	2.18B	2.10B	1.90B	1.73B
Gross Profit	664.86M	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: Neutral
• Last Price: 10.41
• 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 Neutral. The current price of 10.41 is above the 20-day moving average (MA) of 10.30, below the 50-day MA of 10.98, and below the 200-day MA of 13.88, indicating a neutral trend. The MACD of -0.21 indicates Negative momentum. The RSI at 51.15 is Neutral, neither overbought nor oversold. The STOCH value of 79.86 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Neutral sentiment for WEN.

Wendy's Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
DRI	79 Outperform	$24.01B	23.14	46.16%	2.77%	6.03%	4.08%
MCD	70 Outperform	$215.25B	25.84	-216.57%	2.26%	1.17%	2.09%
WING	69 Neutral	$9.55B	57.18	-16.09%	0.34%	22.74%	87.07%
DPZ	68 Neutral	$14.98B	25.61	-14.74%	1.44%	3.65%	5.71%
YUM	66 Neutral	$39.44B	28.06	-19.43%	1.88%	11.30%	-7.82%
Sector *	61 Neutral	$17.22B	11.49	-5.93%	3.08%	1.37%	-15.47%
WEN	60 Neutral	$1.93B	10.55	99.35%	8.44%	1.31%	-1.46%

Wendy's Corporate Events

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.

Wendy’s Appoints Pete Suerken as U.S. President

On July 22, 2025, Wendy’s announced the appointment of Pete Suerken as President, U.S., succeeding Abigail Pringle, who will depart the company after a transition period. Suerken, who has a strong background in supply chain management and innovation, is expected to drive profitability and growth for Wendy’s U.S. operations. This leadership change aims to enhance Wendy’s operational excellence and strategic priorities, benefiting franchisees, employees, and shareholders.

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.

Wendy’s CEO Resignation and Interim Leadership Change

On July 1, 2025, Kirk Tanner announced his resignation as President and CEO of Wendy’s to join The Hershey Company, effective July 18, 2025. Ken Cook, the current CFO, will serve as Interim CEO while continuing his CFO role. The Board has initiated a search for a permanent CEO. Additionally, Bradley G. Peltz was elected to the Board, replacing Matthew H. Peltz, who resigned to focus on other commitments. These leadership changes are part of Wendy’s strategic plan to continue its growth and enhance its market position.

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.

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.