In 2024, restaurant company Wingstop (WING -2.24%) did something for the 21st year in a row: Sales went up at domestic restaurants that had been open for at least a year. To be more specific, domestic same-store sales were up a whopping 19.9% year over year, which is a number so good that it's staggering. To put its growth into perspective, the average Wingstop restaurant location had $1.6 million in annual sales at the end of 2021. At the end of 2024, however, this had grown to an annual average of $2.1 mi ...

Wingstop (WING 0.24%) locations sell chicken wings, as its name implies. It has been a very strong growth story, noting that revenue rose a massive 36% in 2024. However, a key driver of that growth was the opening of 349 restaurants during the year. That's nearly one new restaurant every day. And this is where Wingstop's story gets interesting.What does Wingstop do?The Wingstop food concept is chicken wings. That's a trendy dining option right now, and the company has clearly managed to catch the wave of po ...

Company Performance - Wingstop's stock closed at $220.08, reflecting a -1.14% change from the previous day's closing price, underperforming the S&P 500's daily gain of 0.16% [1] - The stock has decreased by 5.87% over the past month, which is worse than the Retail-Wholesale sector's loss of 5.51% and the S&P 500's loss of 3.59% [1] Upcoming Earnings - The upcoming EPS for Wingstop is projected at $0.84, indicating a 14.29% decline compared to the same quarter last year [2] - Revenue is estimated to be $171.46 million, representing a 17.61% increase compared to the same quarter last year [2] Annual Forecast - Zacks Consensus Estimates predict earnings of $3.66 per share and revenue of $732.76 million for the year, showing no change in earnings and a 17.09% increase in revenue compared to the previous year [3] Analyst Projections - Recent shifts in analyst projections for Wingstop are important as they reflect changes in near-term business trends, with positive estimate revisions indicating a favorable business outlook [4] Zacks Rank System - The Zacks Rank system, which ranges from 1 (Strong Buy) to 5 (Strong Sell), has a history of outperforming, with 1 stocks averaging a +25% annual gain since 1988 [6] - Wingstop currently holds a Zacks Rank of 4 (Sell), with a recent downward shift of 1.98% in the EPS estimate [6] Valuation Metrics - Wingstop has a Forward P/E ratio of 60.84, significantly higher than the industry's average Forward P/E of 22.91 [7] - The company has a PEG ratio of 3.55, compared to the Retail - Restaurants industry's average PEG ratio of 2.23 [7] Industry Context - The Retail - Restaurants industry is part of the Retail-Wholesale sector and currently holds a Zacks Industry Rank of 174, placing it in the bottom 31% of over 250 industries [8] - Research indicates that the top 50% rated industries outperform the bottom half by a factor of 2 to 1 [8]

Core Insights - The retail sector is characterized by both rising and falling companies, with examples including Wingstop, Walgreens, and Dollar General, highlighting the preference for retail-focused REITs like Realty Income [1][6][10] Retail Sector Dynamics - The retail sector's performance is heavily influenced by consumer demand, leading to volatility in stock prices and dividend reliability [2] - Walgreens, once a reliable dividend payer, cut its dividend due to a slowdown in its pharmacy business and is now transitioning to a private entity [3] - Wingstop experienced a 36% revenue growth in 2024 due to the opening of 349 new locations, yet its stock has lost over a third of its value in the past year [4] - Dollar General opened 608 new stores in 2024 and plans to open another 575 in 2025, but its earnings fell nearly 33% year over year, resulting in poor stock performance [5] Investment Strategy - Selecting winners in the retail sector is challenging due to the unpredictable nature of retail concepts and the performance of companies [6] - Realty Income, a REIT with over 15,600 properties, focuses on well-located retail properties, with 73% being single-tenant locations, utilizing a net lease approach to reduce risk [7][8] - Realty Income has a history of three decades of annual dividend increases and currently offers a dividend yield of 5.7%, making it attractive to income investors [7] - The REIT's strategy of acquiring well-located properties allows it to maintain asset value even if tenants struggle, providing a safety net for investors [9] Conclusion - The recommendation is to consider retail-focused REITs like Realty Income instead of trying to pick individual retail winners, as this approach may yield more stable investment outcomes [10][11]

Wingstop (WING 3.72%) is riding the popularity of chicken wings as it aggressively expands its restaurant concept. While growth is the name of the game for the company, there's a subtle, but important, trend that's also helping to propel its success. Here's why opening 349 new locations in 2024 was big and, at the same time, not nearly as notable as how 70% of the company's sales originated in the fourth quarter.Wingstop's growth has been incredibleBefore getting to the 70% figure, it is important to highli ...

Core Viewpoint - Wingstop's stock has declined 52% from its peak due to weakening consumer sentiment, disappointing 2025 guidance, and missed top-line estimates, but it presents an attractive buying opportunity after the price reset [2][4]. Group 1: Growth Track Record - Wingstop has achieved 20 consecutive years of same-store sales growth, a record that includes challenging periods like the financial crisis and the pandemic [4]. - The company reported 10.1% domestic same-store sales growth in Q4 and 19.9% for the full year, with a two-year comparable sales growth exceeding 40% [4][5]. - Wingstop's ability to grow same-store sales while opening new locations indicates strong brand resonance and minimal cannibalization [5]. Group 2: 2025 Guidance - The stock fell 13% following the Q4 earnings report, which missed top-line estimates and provided conservative guidance for 2025 [7][8]. - Management anticipates low-to-mid-single-digit same-store sales growth in 2025, a significant decrease from 19.9% in 2024, attributed to strong growth comparisons [8][9]. - Historically, Wingstop has provided conservative guidance, often exceeding initial forecasts, as seen in its Q4 2023 guidance [9][10]. Group 3: Growth Potential - Wingstop is expanding rapidly in domestic and international markets, leveraging its franchise model to open stores in new and small-footprint locations [11]. - The company opened 349 net new restaurants in 2024, totaling 2,563 locations, with plans for 14%-15% growth in 2025 [12]. - Wingstop aims for 7,000 global locations, tripling its current footprint, with potential for further increases if demand remains strong [13]. Group 4: Valuation and Investment Opportunity - Following the recent stock pullback, Wingstop's valuation appears more reasonable, trading at a price-to-earnings ratio of 56, which aligns with its growth potential [14]. - Despite potential market headwinds in 2025, Wingstop could outperform if it exceeds its same-store sales guidance, positioning itself for long-term growth [14].

Investors often turn to recommendations made by Wall Street analysts before making a Buy, Sell, or Hold decision about a stock. While media reports about rating changes by these brokerage-firm employed (or sell-side) analysts often affect a stock's price, do they really matter?Let's take a look at what these Wall Street heavyweights have to say about Wingstop (WING) before we discuss the reliability of brokerage recommendations and how to use them to your advantage.Wingstop currently has an average brokerag ...

Core Viewpoint - The current economic climate is causing consumer financial strain, leading to a predicted slowdown in spending, which negatively impacts restaurant companies like Chipotle, Wingstop, and Cava [1][2][3] Company Performance - Chipotle's same-store sales increased by 7.4% in 2024, but only 5.4% in Q4, with expectations for 2025 to be in the low- to mid-single-digit range [5] - Wingstop reported a 19.9% increase in same-store sales for 2024 but anticipates low to mid-single-digit growth for 2025 [6] - Cava's same-store sales rose 13.4% in 2024, with expectations of a decline between 6% and 8% in 2025 [6] Growth Drivers - Despite the anticipated slowdown in same-store sales, these companies are expected to continue growing due to new store openings [7][8] - Chipotle's overall sales grew by 14.6% in 2024, driven by the opening of 304 new locations [9][10] - Wingstop's sales surged by 36.8%, with 349 new restaurants opened, while Cava's top line grew by 33.1% with 58 new shops [9][10] Future Outlook - Chipotle plans to open 315 to 345 new locations, Wingstop aims for a 14% to 15% increase in store count, and Cava is looking to open 62 to 66 new restaurants [10] - If these companies achieve their opening targets, they are likely to report solid top-line growth in 2025 despite consumer pullback [11]

Market Overview - The Nasdaq Composite has experienced a decline of approximately 13% in less than a month, which is a common occurrence with 10% market corrections happening roughly every two years [1][2] The Trade Desk - The Trade Desk's stock has fallen 53% from its 2025 highs, contrasting with major competitors like Meta Platforms and Amazon [3][5] - The company connects ad agencies with publishers, providing an independent alternative to larger platforms, which has contributed to its significant growth since 2016 [4][5] - Despite a recent earnings report that did not meet expectations, leading to a significant drop in stock value, the company is transitioning to a new AI-powered platform, Kokai, which may temporarily affect growth [5][6] - The Trade Desk's sales growth of 22% in Q4 2024, although below expectations, still outpaced the global advertising industry's growth rate [6][8] - The company holds a small market share of about 1% in the $1 trillion global advertising industry, indicating substantial growth potential [8] - Megatrends in connected television, premium video, and international expansion could drive The Trade Desk's stock back to new highs [9] Wingstop - Wingstop's stock has decreased by 31% from its 2025 highs, despite achieving its 21st consecutive year of same-store sales growth [10][11] - The market reacted negatively to a slight miss in sales expectations, reducing Wingstop's market capitalization from $9 billion to $6 billion [11][12] - The company is viewed as a strong buy due to its growth potential, with plans to quadruple its store count from the current 2,550 locations [13][14] - Wingstop's store count grew by 16% in 2024, with similar growth expected in 2025, alongside mid- to high-single-digit same-store sales increases [14][15] - The company's dividend yield has increased significantly over the past seven years, making it an attractive investment opportunity [15]

Core Viewpoint - Wingstop's stock is currently cheaper than it has been but is still considered expensive relative to the broader market, with a P/E ratio of around 57 compared to the S&P 500's 27.5 [2][12] Valuation Analysis - Wingstop's P/E ratio has decreased significantly from its highs, where it reached approximately 130 in September 2024 and nearly 150 in March of the previous year, making the current ratio of 57 appear relatively cheap [3][12] - Despite the current valuation being at the lower end of its historical range, it remains high on an absolute basis, indicating that it may not attract value investors until prices drop further [11][12] Market Sentiment - The stock has experienced a 50% decline from its peak, influenced by a broader market correction affecting the Nasdaq Composite, which is down about 10% [2][5] - Investor sentiment has shifted negatively, leading to increased selling pressure on Wingstop shares, which have underperformed compared to the Nasdaq over the past month [8][12] Business Performance - Wingstop's restaurant business is performing well, with a 36.8% increase in sales and a 19.9% rise in same-store sales in the U.S. for 2024, supported by 349 new store openings [7] - The company plans to expand its store base by up to 15% in 2025, indicating potential for continued growth [7] Investment Strategy - For aggressive growth investors, a hybrid approach is suggested: initiating a starter position at the current lower valuation and planning to buy more if the stock continues to decline [9][10][12] - Value investors may find Wingstop unattractive due to its low yield of 0.5%, which does not appeal to income-focused strategies [11]