On Tuesday, Truist Securities updated its outlook on Wingstop (NASDAQ:WING), raising the price target to $407 from the previous $393, while maintaining a Hold rating on the company's shares.
The firm's analysis, based on Truist Card Data, estimates second-quarter 2024 sales at $1.133 billion, which is 6.7% higher than the consensus and suggests a same-store sales (SSS) increase of 16.8%. This forecast aligns closely with Truist's revised estimate, which projects an even higher SSS growth of 24.0%, up from the prior estimate of 17.7%.
The analyst expressed cautious optimism, noting that while there is uncertainty surrounding the data due to variables such as regional weather impacts, unit growth, and delivery sales data, a substantial earnings beat seems probable. This prediction is supported by the fact that the data has consistently indicated strong performance in the previous five quarters.
In addition to the price target adjustment, Truist Securities also increased its adjusted EBITDA estimate for Wingstop to $48.0 million from the earlier projection of $45.4 million. This revised EBITDA forecast surpasses the consensus estimate of $45.2 million. The adjustments reflect the firm's anticipation of Wingstop's continued financial success based on the latest available data.
In other recent news, Wingstop has seen a series of price target upgrades following strong Q1 results. Truist Securities increased its price target for the company to $393, maintaining a Hold rating. This comes after Wingstop surpassed expectations for domestic store openings in Q2 2024, with an estimated 75 net openings, significantly higher than the consensus estimate of 59.
Stifel also raised its price target on Wingstop shares to $460, citing potential for high single-digit comparable sales growth and increasing new unit volumes. TD Cowen reiterated a Buy rating on Wingstop, maintaining a $430.00 price target, highlighting the effectiveness of the company's management team and franchise model. BMO Capital Markets increased its price target from $275 to $325, while Baird raised its target to $405.
InvestingPro Insights
Complementing Truist Securities' positive outlook on Wingstop, InvestingPro data reveals robust financial indicators for the company. With a market capitalization of $11.94 billion and a notable revenue growth of 27.46% in the last twelve months as of Q1 2024, Wingstop's financial health appears strong. The company's impressive revenue growth is further underscored by a quarterly increase of 34.09% in Q1 2024. Additionally, Wingstop's gross profit margin stands at a healthy 48.63%, indicating efficient operations and strong pricing power.
InvestingPro Tips also highlight critical aspects of Wingstop's stock performance and valuation. Analysts predict sales growth in the current year, and the company has maintained dividend payments for nine consecutive years, showcasing its commitment to shareholder returns. However, potential investors should be aware that Wingstop is trading at a high earnings multiple, with a P/E ratio of 146.05, which suggests a premium valuation relative to near-term earnings growth.
For those considering an investment in Wingstop, leveraging the insights available on InvestingPro could provide a strategic advantage. There are 16 additional InvestingPro Tips available, offering in-depth analysis and guidance. To access these tips and enhance your investment strategy, use the coupon code PRONEWS24 to get up to 10% off a yearly Pro and a yearly or biyearly Pro+ subscription at https://www.investing.com/pro/WING.
This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.