Wendy's (WEN) AI Stock Analysis

• Market Cap: $1.61B
• Dividend Yield: 8.7%
• Average Volume (3M): 7.40M
• Price to Earnings (P/E): 9.0
• Beta (1Y): 0.41
• Revenue Growth: -0.21%
• EPS Growth: 0.16%
• Country: US
• Employees: 4,833
• Sector: Consumer Cyclical
• Sector Strength: 84
• Industry: Restaurants
• EPS (TTM): 0.24
• Shares Outstanding: 190,339,780
• 10 Day Avg. Volume: 7,093,425
• 30 Day Avg. Volume: 7,400,571
• 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: 3.38
• Enterprise Value/Revenue: 2.46
• Enterprise Value/Gross Profit: 6.92
• Enterprise Value/Ebitda: 10.51
• 1Y Price Target: $9.82
• Price Target Upside: 16.21% Upside
• Rating Consensus: Hold
• Number of Analyst Covering: 22
• EPS Forecast (FY): 0.87
• Revenue Forecast (FY): $2.17B

• Rating: 60 Neutral
• Price Target: $8.50 ▲(0.59% Upside)

Wendy's overall stock score reflects a mix of strengths and challenges. The most significant factor is the company's attractive valuation, with a low P/E ratio and high dividend yield. However, financial performance is hindered by declining revenue growth and high leverage. Technical analysis indicates bearish momentum, while the earnings call reveals strategic initiatives that could drive long-term growth despite current U.S. market challenges.

Positive Factors

International Expansion

Strong international sales growth indicates successful market penetration and diversification, reducing reliance on the U.S. market and enhancing long-term revenue potential.

Project Fresh Initiative

Project Fresh aims to revitalize the brand and optimize operations, potentially driving long-term growth through improved efficiency and market positioning.

Cash Flow Improvement

Increased free cash flow provides financial flexibility for investments and debt management, supporting sustainable growth and shareholder returns.

Negative Factors

U.S. Sales Decline

Declining U.S. sales highlight competitive pressures and consumer challenges, potentially impacting profitability and market share in Wendy's largest market.

High Leverage

High leverage can strain financial resources, limiting the company's ability to invest in growth initiatives and increasing vulnerability to economic downturns.

U.S. Restaurant Margin Pressure

Margin pressure from cost inflation affects profitability, requiring strategic cost management to maintain financial health and competitive pricing.

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

Wendy's financial performance is mixed. The income statement shows stable profitability margins but a concerning decline in revenue growth. The balance sheet indicates high leverage, posing financial risks, while cash flow remains strong, providing some stability. Overall, the company needs to address revenue growth and leverage to improve its financial health.

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	2.21B	2.25B	2.18B	2.10B	1.90B	1.73B
Gross Profit	785.08M	790.01M	776.47M	720.76M	536.66M	621.48M
EBITDA	516.61M	554.23M	552.05M	501.63M	475.30M	403.31M
Net Income	186.09M	194.36M	204.44M	177.37M	200.39M	117.83M
Balance Sheet
Total Assets	4.98B	5.03B	5.18B	5.50B	5.10B	5.04B
Cash, Cash Equivalents and Short-Term Investments	291.41M	450.51M	516.04M	745.89M	249.44M	306.99M
Total Debt	4.12B	4.09B	4.14B	4.28B	3.86B	3.68B
Total Liabilities	4.87B	4.78B	4.87B	5.03B	4.66B	4.49B
Stockholders Equity	109.19M	259.35M	309.78M	465.72M	436.40M	549.60M
Cash Flow
Free Cash Flow	237.82M	260.92M	260.39M	174.36M	267.79M	215.39M
Operating Cash Flow	343.89M	355.31M	345.42M	259.90M	345.77M	284.36M
Investing Cash Flow	-161.07M	-129.31M	-86.55M	-77.78M	-154.67M	-68.25M
Financing Cash Flow	-382.16M	-303.10M	-504.30M	288.67M	-242.74M	-157.91M

Wendy's Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 8.45
• 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 8.45 is below the 20-day moving average (MA) of 8.52, below the 50-day MA of 8.84, and below the 200-day MA of 11.15, indicating a bearish trend. The MACD of -0.18 indicates Negative momentum. The RSI at 47.52 is Neutral, neither overbought nor oversold. The STOCH value of 68.90 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	67 Neutral	$2.38B	14.50	39.14%	2.26%	4.90%	27.14%
WING	65 Neutral	$7.36B	43.22	―	0.43%	15.56%	79.02%
Sector *	61 Neutral	$18.38B	12.79	-2.54%	3.03%	1.52%	-15.83%
WEN	60 Neutral	$1.61B	8.96	100.85%	8.70%	-0.21%	0.16%
DPZ	58 Neutral	$14.04B	24.29	―	1.60%	3.92%	4.98%
PZZA	56 Neutral	$1.38B	37.10	―	4.37%	-0.64%	-60.71%
JACK	52 Neutral	$372.46M	―	―	8.93%	-6.75%	-118.94%

Wendy's Corporate Events

Wendy’s Reports Mixed Q3 2025 Results Amid Global Growth

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 popular menu items, operating over 7,000 restaurants globally. In its third-quarter 2025 earnings report, Wendy’s highlighted a mixed performance with global systemwide sales experiencing a slight decline of 2.6%, while international sales saw a robust growth of 8.6%. The company opened 54 new restaurants, contributing to a total of 172 new additions by the end of the quarter. Despite a decrease in net income to $44.3 million, adjusted EBITDA saw a modest increase of 2.1% to $138 million. Key financial metrics revealed a decline in U.S. systemwide sales due to lower same-restaurant sales, although international growth and new openings provided a positive offset. The company also returned $40.7 million to shareholders through dividends and share repurchases. Wendy’s launched ‘Project Fresh,’ aiming at brand revitalization and operational excellence to drive growth in the U.S. market. Looking ahead, Wendy’s management remains focused on executing strategic initiatives to enhance value for franchisees and shareholders, with a reaffirmed outlook of adjusted EBITDA between $505 to $525 million and adjusted earnings per share ranging from $0.82 to $0.89.

Wendy’s Updates By-Laws to Streamline Governance

On November 5, 2025, Wendy’s Board of Directors approved amendments to the company’s By-Laws, aimed at streamlining stockholder processes and updating governance roles. In its third-quarter 2025 results, Wendy’s reported a 2.6% decline in global systemwide sales to $3.5 billion, despite an 8.6% increase in international sales. The company opened 54 new restaurants, and its net income was $44.3 million, with adjusted EBITDA rising by 2.1% to $138.0 million. Wendy’s also launched ‘Project Fresh,’ a turnaround plan to drive growth in the U.S. market.

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 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.