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Wingstop Inc. (WING) Hit a 52 Week High, Can the Run Continue?
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Have you been paying attention to shares of Wingstop (WING - Free Report) ? Shares have been on the move with the stock up 8.8% over the past month. The stock hit a new 52-week high of $259.95 in the previous session. Wingstop has gained 88.2% since the start of the year compared to the 28.2% move for the Zacks Retail-Wholesale sector and the 11.4% return for the Zacks Retail - Restaurants industry.
What's Driving the Outperformance?
The stock has an impressive record of positive earnings surprises, as it hasn't missed our earnings consensus estimate in any of the last four quarters. In its last earnings report on November 1, 2023, Wingstop reported EPS of $0.69 versus consensus estimate of $0.52.
For the current fiscal year, Wingstop is expected to post earnings of $2.40 per share on $451.48 million in revenues. This represents a 29.73% change in EPS on a 26.28% change in revenues. For the next fiscal year, the company is expected to earn $2.84 per share on $522.82 million in revenues. This represents a year-over-year change of 18.17% and 15.8%, respectively.
Valuation Metrics
Wingstop may be at a 52-week high right now, but what might the future hold for the stock? A key aspect of this question is taking a look at valuation metrics in order to determine if the company is due for a pullback from this level.
On this front, we can look at the Zacks Style Scores, as these give investors a variety of ways to comb through stocks (beyond looking at the Zacks Rank of a security). These styles are represented by grades running from A to F in the categories of Value, Growth, and Momentum, while there is a combined VGM Score as well. The idea behind the style scores is to help investors pick the most appropriate Zacks Rank stocks based on their individual investment style.
Wingstop has a Value Score of F. The stock's Growth and Momentum Scores are A and A, respectively, giving the company a VGM Score of B.
In terms of its value breakdown, the stock currently trades at 107.9X current fiscal year EPS estimates, which is a premium to the peer industry average of 21.9X. On a trailing cash flow basis, the stock currently trades at 113.6X versus its peer group's average of 13.2X. Additionally, the stock has a PEG ratio of 4.94. This isn't enough to put the company in the top echelon of all stocks we cover from a value perspective.
Zacks Rank
We also need to consider the stock's Zacks Rank, as this supersedes any trend on the style score front. Fortunately, Wingstop currently has a Zacks Rank of #1 (Strong Buy) thanks to rising earnings estimates.
Since we recommend that investors select stocks carrying Zacks Rank of 1 (Strong Buy) or 2 (Buy) and Style Scores of A or B, it looks as if Wingstop meets the list of requirements. Thus, it seems as though Wingstop shares could still be poised for more gains ahead.
How Does WING Stack Up to the Competition?
Shares of WING have been soaring, and the company still appears to be a decent choice, but what about the rest of the industry? One industry peer that looks good is Arcos Dorados Holdings Inc. (ARCO - Free Report) . ARCO has a Zacks Rank of # 1 (Strong Buy) and a Value Score of A, a Growth Score of A, and a Momentum Score of B.
Earnings were strong last quarter. Arcos Dorados Holdings Inc. beat our consensus estimate by 50%, and for the current fiscal year, ARCO is expected to post earnings of $0.95 per share on revenue of $4.3 billion.
Shares of Arcos Dorados Holdings Inc. have gained 11.3% over the past month, and currently trade at a forward P/E of 15.52X and a P/CF of 10.13X.
The Retail - Restaurants industry is in the top 22% of all the industries we have in our universe, so it looks like there are some nice tailwinds for WING and ARCO, even beyond their own solid fundamental situation.
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Wingstop Inc. (WING) Hit a 52 Week High, Can the Run Continue?
Have you been paying attention to shares of Wingstop (WING - Free Report) ? Shares have been on the move with the stock up 8.8% over the past month. The stock hit a new 52-week high of $259.95 in the previous session. Wingstop has gained 88.2% since the start of the year compared to the 28.2% move for the Zacks Retail-Wholesale sector and the 11.4% return for the Zacks Retail - Restaurants industry.
What's Driving the Outperformance?
The stock has an impressive record of positive earnings surprises, as it hasn't missed our earnings consensus estimate in any of the last four quarters. In its last earnings report on November 1, 2023, Wingstop reported EPS of $0.69 versus consensus estimate of $0.52.
For the current fiscal year, Wingstop is expected to post earnings of $2.40 per share on $451.48 million in revenues. This represents a 29.73% change in EPS on a 26.28% change in revenues. For the next fiscal year, the company is expected to earn $2.84 per share on $522.82 million in revenues. This represents a year-over-year change of 18.17% and 15.8%, respectively.
Valuation Metrics
Wingstop may be at a 52-week high right now, but what might the future hold for the stock? A key aspect of this question is taking a look at valuation metrics in order to determine if the company is due for a pullback from this level.
On this front, we can look at the Zacks Style Scores, as these give investors a variety of ways to comb through stocks (beyond looking at the Zacks Rank of a security). These styles are represented by grades running from A to F in the categories of Value, Growth, and Momentum, while there is a combined VGM Score as well. The idea behind the style scores is to help investors pick the most appropriate Zacks Rank stocks based on their individual investment style.
Wingstop has a Value Score of F. The stock's Growth and Momentum Scores are A and A, respectively, giving the company a VGM Score of B.
In terms of its value breakdown, the stock currently trades at 107.9X current fiscal year EPS estimates, which is a premium to the peer industry average of 21.9X. On a trailing cash flow basis, the stock currently trades at 113.6X versus its peer group's average of 13.2X. Additionally, the stock has a PEG ratio of 4.94. This isn't enough to put the company in the top echelon of all stocks we cover from a value perspective.
Zacks Rank
We also need to consider the stock's Zacks Rank, as this supersedes any trend on the style score front. Fortunately, Wingstop currently has a Zacks Rank of #1 (Strong Buy) thanks to rising earnings estimates.
Since we recommend that investors select stocks carrying Zacks Rank of 1 (Strong Buy) or 2 (Buy) and Style Scores of A or B, it looks as if Wingstop meets the list of requirements. Thus, it seems as though Wingstop shares could still be poised for more gains ahead.
How Does WING Stack Up to the Competition?
Shares of WING have been soaring, and the company still appears to be a decent choice, but what about the rest of the industry? One industry peer that looks good is Arcos Dorados Holdings Inc. (ARCO - Free Report) . ARCO has a Zacks Rank of # 1 (Strong Buy) and a Value Score of A, a Growth Score of A, and a Momentum Score of B.
Earnings were strong last quarter. Arcos Dorados Holdings Inc. beat our consensus estimate by 50%, and for the current fiscal year, ARCO is expected to post earnings of $0.95 per share on revenue of $4.3 billion.
Shares of Arcos Dorados Holdings Inc. have gained 11.3% over the past month, and currently trade at a forward P/E of 15.52X and a P/CF of 10.13X.
The Retail - Restaurants industry is in the top 22% of all the industries we have in our universe, so it looks like there are some nice tailwinds for WING and ARCO, even beyond their own solid fundamental situation.