We came across a bullish thesis on The Wendy’s Company on slo capital’s Substack by Justin. In this article, we will summarize the bulls’ thesis on WEN. The Wendy’s Company's share was trading at $9.09 as of September 23rd. WEN’s trailing and forward P/E were 9.47 and 8.87 respectively according to Yahoo Finance. 5 Highest Quality Fast Food Chains in the US TMON/Shutterstock.com Wendy’s (WEN) stands out as a resilient quick-service restaurant (QSR) with a business model built on habit, strategic real es ...

Investment Rating - The report assigns a "Buy-A" investment rating to the company, with a target price of HKD 19.02 over the next six months [4]. Core Insights - The company reported a revenue of HKD 0.01 billion and a net profit of -HKD 0.88 billion for the reporting period. The oral small molecule GLP-1 agonist ASC30 shows potential for BIC, and overseas licensing opportunities are promising. ASC30 demonstrated an average weight reduction of 6.5% relative to baseline in a U.S. Phase Ib trial [1][2]. - The company has multiple pipeline products advancing rapidly, including ASC30 subcutaneous injection and ASC47 THRb subcutaneous injection, with top-line data expected within the year. The revenue projections for 2025 to 2027 are HKD 0.03 billion, HKD 0.7 billion, and HKD 1.4 billion, respectively, with net profits projected at -HKD 3.0 billion, -HKD 2.8 billion, and -HKD 2.9 billion [2][6]. Financial Summary - The company’s total revenue for 2023 is projected at HKD 56.60 million, with a significant increase expected in subsequent years, reaching HKD 137.92 million by 2027. However, net profits are expected to remain negative throughout this period [6][10]. - The company’s cash flow from operating activities is projected to be negative in 2025 at -HKD 168.66 million, with a recovery expected in 2026 [9]. - The balance sheet shows total assets decreasing from HKD 2,491.01 million in 2023 to HKD 1,232.41 million by 2027, indicating a potential liquidity concern [8]. Market Performance - The stock has shown significant performance, with a 12-month absolute return of 1,733.3% and a relative return of 1,701.2% [5]. - The current stock price is HKD 14.85, which is below the target price, indicating potential upside for investors [4]. Pipeline Development - The company is advancing several clinical trials, including ASC30 and ASC47, with expected top-line data releases within the year, which could significantly impact future revenue streams [2][6]. - The DCF model suggests a strong growth trajectory for revenue, with projections indicating a rise to HKD 70.0 billion by 2034 [7]. Valuation Metrics - The projected P/E ratio for 2025 is -44.23, reflecting the company's current unprofitability but potential for future growth as products are commercialized [11]. - The projected net profit margin is expected to improve significantly, moving from -255.70% in 2024 to -207.79% in 2027, indicating a gradual recovery [11].

Core Viewpoint - Despite Elon Musk's ambitious claims regarding Tesla's AI supercomputing system, fully autonomous driving, Robotaxi, and humanoid robot applications, the company fundamentally remains an electric vehicle manufacturer, with automotive sales contributing 75% of its revenue, while the contributions from AI-driven initiatives are minimal and uncertain [1][2][3] Group 1: Financial Performance - Tesla's automotive business generated $167 billion in revenue for the second quarter of fiscal year 2025, down from $199 billion in the same period last year, reflecting a 12% year-over-year decline [3][6] - The company's gross margin fell to 17.2%, a decrease of 71 basis points year-over-year, attributed to declining sales and increased discounts [6] - The second quarter vehicle deliveries unexpectedly dropped by 13% year-over-year, with Model 3/Y deliveries down 12% and luxury models down 52% [6] Group 2: Market Challenges - Tesla's market share in Europe has been significantly eroded, with sales continuously declining due to increased competition from established automakers like Volkswagen and Renault [3][7] - The company's market share in the UK has plummeted to below 1% this year, indicating a substantial loss of presence in a key market [3][7] - The political backlash against Musk has negatively impacted Tesla's sales in Europe, as many customers are reluctant to associate with his values [8] Group 3: Valuation Insights - Analyst Gytis Zizys estimates that even under the most optimistic discounted cash flow (DCF) assumptions, Tesla's intrinsic value is only $233 per share, suggesting that the current trading price of approximately $310 is overvalued [3][10] - The DCF model used by Zizys incorporates a weighted average cost of capital (WACC) of 10.8% and a terminal growth rate of 2.5%, leading to a significant downside potential of 24.3% from the current share price [10] Group 4: Future Business Prospects - The revenue contribution from AI-driven initiatives like Full Self-Driving (FSD) and Robotaxi remains below 10% of Tesla's total revenue, indicating limited current financial impact [2][3] - The anticipated growth in Tesla's energy storage systems is projected to reach $10 billion in 2024, but current deployment rates suggest that the long-term goals set by Musk may not be achievable [9]