Why Wingstop Stock Plunged to a 52-Week Low Today

Core Insights - Wingstop has been a strong restaurant stock since its IPO in 2015, but recently it has hit 52-week lows after a 12% drop following its Q4 2024 financial results [1] Financial Performance - Wingstop reported a 10% year-over-year increase in same-store sales for Q4 2024, marking the 21st consecutive year of growth in this metric [2][6] - The company opened 349 net new restaurants in 2024, increasing its total by nearly 16% [3] - Revenue for 2024 rose by 36% to $626 million, while net income increased by 55$109 million [3] Market Valuation - The stock was trading at over 20 times sales last year, which is considered an extreme valuation for a restaurant stock, even with its growth and high-margin franchise model [4] - The slight miss in Q4 same-store sales expectations contributed to investor sell-off, leading to the stock's decline [4] Long-term Outlook - Despite the recent downturn, Wingstop shares have appreciated by 75% over the last three years, indicating strong long-term performance [5] - Management plans to open thousands of new locations, which is expected to enhance shareholder value in the long run [6]