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Bear of the Day: Buffalo Wild Wings (BWLD)

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The restaurant boom is clearly over.

No longer are investors excited about any and every food stock, and you really can’t blame them when you look to recent price activity either. The space has been absolutely destroyed, and competition is taking its toll on a number of companies that used to be darlings of the market.

Take Buffalo Wild Wings BWLD as a great example of this trend. After an incredible run that saw shares of BWLD rise over $200/share, investors have seen an equally incredible trend in the past two years which has basically seen the company’s share price take a 50% haircut.

But with such a big drop, investors have to be wondering if the worst is over for BWLD, and if a turnaround could be at hand. Well, unfortunately for BWLD investors, the recent estimate trend suggests that more pain could be ahead for this restaurant company in the near-term.

Recent Earnings & Outlook

This prediction of sluggishness isn’t really that bold of a statement if we taking the starting point of the last earnings report for BWLD. The company wasn’t anywhere close to meeting earnings expectations, posting EPS of just 66 cents which is a far cry from the $1.01/share consensus estimate.

But if that wasn’t enough, analysts appear to be pretty bearish on the company’s near term prospects, as they have been slashing estimates for the coming quarter and year. In fact, in just the past two months, we have seen a double digit percentage decline in the consensus estimate for both the current quarter and the current year.

Buffalo Wild Wings, Inc. Price, Consensus and EPS Surprise

Buffalo Wild Wings, Inc. Price, Consensus and EPS Surprise | Buffalo Wild Wings, Inc. Quote

With figures like that and a brutal market in the restaurant industry, things aren’t looking good for BWLD right now. Which is why it shouldn’t be a surprise that we are not anticipating a big turnaround any time soon, and why we have given the stock a Zacks Rank #5 (Strong Sell) too.

Other Choices

If you do want to stay in the restaurant industry, then it might be time to look at McDonald’s ((MCD - Free Report) ). This company’s turnaround is going incredibly well, and the stock is a Zacks Rank #2 (Buy) right now too.

Plus, the most recent earnings report showed great growth and the potential for better figures in the future thanks to technological initiatives. This seems to be a much better choice for investors these days, at least when compared to BWLD and their current situation.

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