Nasdaq Sell-Off: Is Wingstop Stock Still a Buy?

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]