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Investing.com - Raymond James upgraded Wingstop (NASDAQ:WING) from Outperform to Strong Buy and maintained its $420 price target, citing the company’s Smart Kitchen system as a "game changer" despite recent stock volatility. The target sits well within the current analyst range of $178 to $477, with InvestingPro data showing the stock maintains a "GREAT" financial health score.
The stock had surged from approximately $290 to $380 following second-quarter results before giving back about $55 of those gains in the past two weeks, according to Raymond James. The firm attributes this pullback to "choppy third party data" that might create modest risk to third-quarter comparable sales. This volatility aligns with InvestingPro analysis, which identifies significant price movements as a key characteristic of the stock. Subscribers can access 12 additional ProTips and comprehensive valuation metrics for deeper insights.
Raymond James remains confident that comparable sales can begin improving through September and accelerate further through the fourth quarter as comparisons ease. The firm notes September comparisons are approximately 10% less difficult than July/August, with fourth-quarter comparisons about 10% less difficult than third-quarter.
The Smart Kitchen system—a proprietary kitchen display system with demand forecasting—is showing encouraging early results, including company-owned locations outperforming franchisee locations by 550 basis points in the second quarter. Other improvements include reduced ticket times to approximately 10 minutes from 18-22 minutes historically and higher guest satisfaction scores.
Raymond James views Wingstop’s valuation as "even more attractive at current levels" with a 2026 estimated EV/EBITDA of approximately 34x and expects high teens to low 20s annual EBITDA growth over the next few years, powered by mid-teens unit growth and positive comparable sales into 2026. Current metrics from InvestingPro show impressive revenue growth of 22.7% over the last twelve months, though the stock appears overvalued based on InvestingPro’s Fair Value analysis. For comprehensive insights, including detailed valuation metrics and growth projections, investors can access the full Pro Research Report, available exclusively to subscribers.
In other recent news, Wingstop reported its second-quarter earnings for 2025, exceeding expectations with an adjusted earnings per share of $1.00, surpassing the forecasted $0.87. Revenue also came in higher than anticipated, reaching $174.3 million against a projection of $173.41 million. Following these results, several analyst firms have adjusted their price targets for the company’s stock. UBS raised its price target to $385 from $335, maintaining a Neutral rating, while Guggenheim increased its target to $410 from $325, maintaining a Buy rating. Guggenheim also revised its earnings per share estimates for Wingstop to $4.15 for 2025 and $5.40 for 2026, reflecting expectations for improved same-store sales and better margins. BMO Capital raised its price target to $345 from $275, citing Wingstop’s earnings per share surpassing consensus estimates by $0.13. Stifel also adjusted its price target to $405 from $350, continuing to support a Buy rating. These recent developments indicate strong analyst confidence in Wingstop’s future performance.
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