Wendy's (WEN) AI Stock Analysis

• Market Cap: $1.60B
• Dividend Yield: 8%
• Average Volume (3M): 7.40M
• Price to Earnings (P/E): 8.9
• Beta (1Y): 0.38
• 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: 6,187,744
• 30 Day Avg. Volume: 7,400,894
• 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: 3.50
• Enterprise Value/Revenue: 2.53
• Enterprise Value/Gross Profit: 7.11
• Enterprise Value/Ebitda: 10.80
• 1Y Price Target: $9.50
• Price Target Upside: 13.37% Upside
• Rating Consensus: Hold
• Number of Analyst Covering: 22
• EPS Forecast (FY): 0.87
• Revenue Forecast (FY): $2.17B

• Rating: 65 Neutral
• Price Target: $9.00 ▲(7.40% Upside)

Wendy's overall stock score reflects a balance of strengths and challenges. The company's strong international growth and strategic initiatives are positive, but high leverage and challenges in the U.S. market weigh on the score. The low P/E ratio and high dividend yield provide some valuation appeal.

Positive Factors

International Growth

Strong international growth highlights Wendy's ability to expand its market presence outside the U.S., providing a buffer against domestic challenges.

Project Fresh Initiative

Project Fresh aims to revitalize the brand and optimize operations, indicating a proactive approach to long-term growth and competitiveness.

Improvement in Digital Sales

Rising digital sales demonstrate Wendy's adaptation to consumer trends, enhancing customer engagement and operational efficiency.

Negative Factors

U.S. Sales Decline

Declining U.S. sales indicate challenges in maintaining market share amid competition, impacting overall revenue growth.

High Leverage

High leverage increases financial risk and limits flexibility, potentially affecting Wendy's ability to invest in growth initiatives.

U.S. Restaurant Margin Pressure

Margin pressure from cost inflation could erode profitability, challenging Wendy's ability to sustain its operational efficiency.

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, with stable profitability but challenges in revenue growth and high leverage. The income statement reflects strong margins, but declining revenue growth is a concern. The balance sheet shows high debt levels, increasing financial risk. Cash flow generation is moderate, with declining free cash flow growth. Overall, Wendy's needs to address revenue growth and leverage to improve its financial health.

Income Statement

Wendy's shows a stable gross profit margin around 35% over the years, indicating consistent cost management. However, the TTM data reveals a slight decline in revenue growth rate (-0.77%), which is concerning compared to previous positive growth rates. The net profit margin has improved to 9.84% in TTM, reflecting better profitability despite revenue challenges. EBIT and EBITDA margins remain strong, though slightly lower than previous years, suggesting operational efficiency.

Balance Sheet

The balance sheet highlights a significant increase in the debt-to-equity ratio to 37.72 in TTM, indicating high leverage and potential financial risk. Return on equity has improved to 1.22% in TTM, showing better utilization of equity despite the high debt levels. The equity ratio is low, reflecting a heavy reliance on debt financing, which could pose risks if market conditions change.

Cash Flow

Cash flow analysis shows a decline in free cash flow growth (-7.42%) in TTM, which is a concern. The operating cash flow to net income ratio is 0.43, indicating moderate cash generation relative to net income. The free cash flow to net income ratio is 0.69, suggesting that a significant portion of net income is converted into free cash flow, albeit lower than previous periods.

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: 8.38
• 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 8.38 is above the 20-day moving average (MA) of 8.34, below the 50-day MA of 8.49, and below the 200-day MA of 10.52, indicating a neutral trend. The MACD of -0.02 indicates Negative momentum. The RSI at 49.32 is Neutral, neither overbought nor oversold. The STOCH value of 52.04 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
DPZ	68 Neutral	$14.58B	25.22	―	1.61%	3.92%	4.98%
CAKE	66 Neutral	$2.59B	15.80	39.14%	2.08%	4.90%	27.14%
WEN	65 Neutral	$1.60B	8.88	100.85%	8.00%	-0.21%	0.16%
WING	63 Neutral	$7.20B	42.31	―	0.44%	15.56%	79.02%
Sector *	61 Neutral	$18.38B	12.79	-2.54%	3.03%	1.52%	-15.83%
PZZA	57 Neutral	$1.34B	36.03	―	4.50%	-0.64%	-60.71%
JACK	53 Neutral	$366.98M	-4.56	―	9.06%	-6.75%	-118.94%

Wendy's Corporate Events

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.

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.

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.

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.