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Wendy's (WEN)
NASDAQ:WEN
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Wendy's
(NASDAQ:WEN)
Rating:66Neutral
Price Target:―
Positive Factors
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.
Valuation Opportunity
Wendy’s current share price provides a value-oriented opportunity with significant upside to equity value and potential for FCF yield to improve.
Negative Factors
Competitive Pressures
Wendy’s Company lowered its full-year guidance, implying potential challenges in maintaining market share amid competitive pressures.
Economic Environment
Wendy's is perceived as less well-positioned for a tighter U.S. consumer spending environment compared to some of its quick-service peers.
Sales Performance
U.S. comparable sales declined, reflecting weather impacts and intensified consumer pressures, affecting overall performance.
Wendy's (WEN) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$2.20B
Dividend Yield4.9%
Average Volume (3M)5.12M
Price to Earnings (P/E)12.3
Beta (1Y)0.30
Revenue Growth2.18%
EPS Growth-5.15%
CountryUS
Employees4,833
SectorConsumer Cyclical
Sector Strength57
IndustryRestaurants
Share Statistics
EPS (TTM)0.20
Shares Outstanding192,025,250
10 Day Avg. Volume5,641,659
30 Day Avg. Volume5,123,742
Financial Highlights & Ratios
PEG Ratio-3.10
Price to Book (P/B)10.39
Price to Sales (P/S)0.00
P/FCF Ratio27.74
Enterprise Value/Market Cap3.80
Enterprise Value/Revenue0.98
Enterprise Value/Gross Profit12.51
Enterprise Value/Ebitda3.93
Forecast
1Y Price Target
$14.53Price Target Upside29.96% Upside
Rating ConsensusHold
Number of Analyst Covering19
Wendy's Business Overview & Revenue Model
Company DescriptionWendy's Company (WEN) is a leading international fast-food chain, predominantly operating in the quick-service restaurant sector. Founded in 1969 by Dave Thomas, Wendy's is renowned for its square hamburgers, sea salt fries, and Frosty desserts. The company's core services include the preparation and sale of a variety of fresh, made-to-order burgers, chicken sandwiches, salads, and other side items, all emphasizing quality and taste. With a brand presence spanning numerous countries, Wendy's operates through company-owned and franchised locations, maintaining a commitment to quality ingredients and customer satisfaction.
How the Company Makes MoneyWendy'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 Key Performance Indicators (KPIs)
Any
Store Count by Type
Shows the distribution of different store formats, such as company-owned versus franchised locations, highlighting Wendy's growth strategy and market penetration.
Shows the distribution of different store formats, such as company-owned versus franchised locations, highlighting Wendy's growth strategy and market penetration.
Data provided by:
Main Street Data
Main Street DataWendy's Earnings Call Summary
Earnings Call Date:May 02, 2025
(Q1-2025)
| % Change Since: -9.40%|
Next Earnings Date:Aug 06, 2025
Earnings Call Sentiment Neutral
The earnings call presented a mixed picture with significant international growth and technological advancements, while facing challenges such as declining same restaurant sales and a tough consumer environment in the U.S. The updated financial outlook reflects these challenges, indicating a cautious stance for the remainder of 2025.Q1-2025 Updates
Positive Updates
International Sales Growth
Internationally, same restaurant sales grew by 2.3% and system-wide sales grew by 8.9%.
New Restaurant Openings
Opened 74 new restaurants globally, with over 60% of these openings occurring internationally.
Technology and Customer Engagement
Digital mix reached a record of over 20% of total sales, with enhanced app engagement metrics, including an all-time high in conversion rate.
Shareholder Returns
Returned more than $173 million to shareholders through dividend and share repurchases in the first quarter.
Franchisee Growth Commitments
Signed agreements for 25 new restaurants in Guadalajara, Mexico, and 30 more restaurants in Chile.
Negative Updates
Decline in Same Restaurant Sales
Global same restaurant sales declined by 2.1%, driven by a 2.8% decline in the U.S. due to weather and consumer environment challenges.
Global Systems Sales Decline
Global systems sales decreased by 1.1% on a constant currency basis.
Challenged Consumer Environment
The consumer confidence deteriorated in March, leading to a reduction in demand.
Updated Financial Outlook
Full-year global system wide sales are now expected to be flat to down 2%, with adjusted EBITDA between $530 million and $545 million.
U.S. Company Restaurant Margin Contraction
U.S. company-operated restaurant margin contracted by 50 basis points year-over-year.
Company Guidance
During the fiscal 2025 first quarter earnings call, Wendy's provided guidance for the year, emphasizing a cautious outlook given the challenging consumer environment. The company updated its full-year expectations, projecting global system-wide sales to be flat to down 2%, adjusted EBITDA between $530 million and $545 million, and adjusted EPS of $0.92 to $0.98. Despite the anticipated headwinds, Wendy's reaffirmed its commitment to achieving 2% to 3% net unit growth in 2025. The company also highlighted its strategic initiatives to drive long-term growth, including a focus on operational excellence, customer experience, and innovation through collaborations like the Thin Mint Frosty and upcoming Takis partnerships. Additionally, Wendy's plans to return approximately $325 million to shareholders through dividends and share repurchases in 2025, an increase of up to $40 million compared to 2024.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.75
Positive
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.65
Positive
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.70
Positive
| 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 | EBIT |
| 283.21M | 371.36M | 381.98M | 353.31M | 366.96M | 269.31M | EBITDA |
| 455.80M | 554.23M | 552.05M | 535.55M | 458.55M | 416.91M | Net Income Common Stockholders |
| 191.60M | 194.36M | 204.44M | 177.37M | 200.39M | 117.83M |
| Balance Sheet | Cash, Cash Equivalents and Short-Term Investments | ||||
| 335.26M | 450.51M | 516.04M | 745.89M | 249.44M | 306.99M | Total Assets |
| 4.92B | 5.03B | 5.18B | 5.50B | 5.10B | 5.04B | Total Debt |
| 4.08B | 4.09B | 4.14B | 4.28B | 3.86B | 3.68B | Net Debt |
| 3.74B | 3.64B | 3.62B | 3.54B | 3.61B | 3.37B | 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
Negative
11.18
Price Trends
12.08
Negative
13.37
Negative
15.17
Negative
Market Momentum
-0.22
Negative
38.21
Neutral
29.75
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 11.18 is below the 20-day moving average (MA) of 11.51, below the 50-day MA of 12.08, and below the 200-day MA of 15.17, indicating a bearish trend. The MACD of -0.22 indicates Negative momentum. The RSI at 38.21 is Neutral, neither overbought nor oversold. The STOCH value of 29.75 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 34 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 0 New Risks
Wendy's Peers Comparison
Overall Rating
UnderperformOutperform
Sector (62)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
82 Outperform | $25.47B | 24.56 | 48.22% | 2.57% | 5.00% | 3.73% | |
71 Outperform | $215.74B | 26.62 | -216.57% | 2.33% | -0.22% | -3.83% | |
71 Outperform | $10.63B | 63.92 | -16.09% | 0.30% | 30.98% | 112.65% | |
66 Neutral | $2.20B | 12.25 | 90.40% | 4.90% | 2.18% | -5.15% | |
66 Neutral | $15.44B | 25.92 | -14.74% | 1.54% | 4.28% | 13.76% | |
66 Neutral | $39.86B | 28.59 | -19.43% | 1.97% | 10.09% | -11.50% | |
62 Neutral | $6.90B | 11.05 | 2.80% | 4.27% | 2.67% | -24.92% |
* Consumer Cyclical Sector Average
Performance Comparison
WEN
Wendy's
11.18
-4.57
-29.02%
DRI
Darden Restaurants
217.50
73.65
51.20%
DPZ
Domino's Pizza
452.15
-61.54
-11.98%
MCD
McDonald's
301.91
54.15
21.86%
YUM
Yum! Brands
144.00
9.84
7.33%
WING
Wingstop
354.06
-43.29
-10.89%
Wendy's Corporate Events
Executive/Board ChangesShareholder Meetings
Wendy’s Stockholders Approve Executive Compensation
Neutral
May 22, 2025
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.
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.