WING - Embedded Expectations Analysis - 2018 01 23
─ Wingstop Inc. (WING:USA) currently trades at historical highs relative toUAFRS-based (Uniform) Earnings, with a 50.3x Uniform P/E, suggesting bullish expectations for the firm. However, management has concerns about initiatives, costs, and growth
─ Specifically, although management is confident in their continued best-in-class type of growth going into 2018, they appear to be concerned about their ability to sustain improvements in food costs as well as the sustainability of strong top-line results. Moreover, they might be concerned about their ability to maintain the pace of net new restaurant opens, and might have concerns about their ability to meet adjusted EBITDA targets. Finally, they may be exaggerating initial results related to their split menu, and may be concerned about the sustainability of growth in their digital sales mix
Wingstop is a franchisor and operator of restaurants that focuses on cooked-to-order, hand-sauced and tossed chicken wings. The company provides its guests several flavors on its bone-in and boneless chicken wings and tenders paired with seasoned fries, Ranch, and Bleu Cheese dips. The company's proprietary flavors, which range from extremely hot to mild includes Atomic, Mango Habanero, Cajun, Original Hot, Spicy Korean Q, Louisiana Rub, Mild, Hickory Smoked BBQ, Lemon Pepper, Garlic Parmesan, and Hawaiian. To complement its wings, the company serves seasoned fries, as well as carrots and celery and Ranch and Bleu Cheese Dips made with buttermilk.
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