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On Thursday, Benchmark analysts adjusted their outlook on Wingstop (NASDAQ:WING) shares, reducing the price target from $340.00 to $325.00, while maintaining a Buy rating on the stock. The revision followed Wingstop’s latest financial results, which were a mix of highs and lows compared to market expectations. The stock, currently trading at $245.56, has experienced significant pressure recently, falling 15% in the past week alone. InvestingPro data shows the company maintains a healthy market capitalization of $7.17 billion despite recent volatility.
Wingstop’s fourth-quarter earnings, released before the market opened on February 19, 2024, revealed a year-over-year revenue increase of 27% to $162 million. However, this figure fell short of the consensus estimate of $165 million. The company’s domestic same-store sales (SSS) grew by 10.1%, which also did not meet the anticipated 10.6%. Additionally, the restaurant level operating margin (RLOM) was reported at 22.4%, marginally below the consensus by 20 basis points. According to InvestingPro analysis, the company maintains strong financial health with a current ratio of 4.52, indicating excellent liquidity, and operates with a moderate level of debt. For deeper insights into Wingstop’s financial health and 15+ additional ProTips, consider exploring InvestingPro’s comprehensive analysis.
Despite these misses, the company managed to outperform expectations in other key financial metrics. Operating income, earnings per share (EPS), and adjusted EBITDA all exceeded consensus estimates. Wingstop reported an EPS of $0.92 and adjusted EBITDA of $56.3 million, marking a 44% increase year-over-year for both figures. These results surpassed the expected EPS of $0.87 and adjusted EBITDA of $51.5 million.
The analyst, Todd Brooks, cited the company’s lower-than-anticipated SG&A expenses, which contributed to the positive outcomes in EPS and EBITDA. In light of the recent financial performance, Benchmark analysts have set their future expectations, initiating a forecast for fiscal year 2026’s adjusted EBITDA at $294 million.
While the price target has been adjusted downward, Benchmark’s continued endorsement of a Buy rating indicates their confidence in Wingstop’s long-term growth potential. The new price target of $325 is based on a 35 times multiple of the firm’s projected fiscal year 2026 adjusted EBITDA. InvestingPro data shows the stock currently trades at a P/E ratio of 72.12, reflecting high growth expectations. The company’s overall Financial Health Score of 2.91 (GOOD) suggests solid fundamentals despite current market challenges. Detailed valuation analysis and growth projections are available in InvestingPro’s exclusive Research Report, part of their coverage of 1,400+ top US stocks.
In other recent news, Wingstop’s financial performance and future outlook have prompted several analyst firms to adjust their price targets. Wingstop reported a fourth-quarter earnings per share (EPS) of $0.96, exceeding consensus estimates, although its revenue growth fell short of expectations. Despite this, Goldman Sachs maintained a Buy rating and set a new price target of $330, citing long-term growth potential. BMO Capital Markets also adjusted its price target to $300, noting mixed results with EPS surpassing expectations but same-store sales and restaurant margins falling short. Bernstein revised its target to $330, maintaining an Outperform rating, while highlighting Wingstop’s untapped market potential and increased advertising efforts.
TD Cowen reduced its price target to $305, maintaining a Buy rating, and noted Wingstop’s sensitivity to lower-income consumer spending. The firm also adjusted its 2025 earnings estimates, aligning with the company’s guidance for growth. Truist Securities set a price target of $290 and maintained a Hold rating, pointing to Wingstop’s same-store sales miss and the need for greater clarity on sales trends. These developments reflect a cautious yet optimistic outlook from analysts, with attention on Wingstop’s strategic initiatives and market positioning.
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