On Wednesday, Wingstop Inc . (NASDAQ:WING) received an updated price target from Jefferies, an investment firm, as the analyst recognized the company's robust fourth-quarter same-store sales (SSS). The price target was increased to $280 from the previous $245 while maintaining a Hold rating on the stock.
Wingstop's fourth-quarter SSS showed a significant increase of 21.2%, surpassing the consensus estimate of 14.9%. The analyst highlighted that the results were in line with investor expectations. The growth in revenue was attributed to the opening of new units and a modest rise in restaurant-level margin (RLM), which contributed to an EBITDA beat.
The analyst's outlook for Wingstop's same-store sales growth for 2024 remains at the high end of the company's long-term algorithm, suggesting that it could be a realistic benchmark. This projection is based on the continued scaling and materialization of existing drivers of comparable sales, which have historically outperformed conservative estimates throughout 2023.
Despite the positive performance, the firm advised caution, pointing out Wingstop's elevated trading multiple, which is approximately 50 times, excluding stock-based compensation (SBC).
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