3 Reasons to Buy Wingstop Stock Like There's No Tomorrow

3 weeks ago 14

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Jeremy Bowman, The Motley Fool

Sat, Mar 22, 2025, 3:15 PM 5 min read

Wingstop (NASDAQ: WING) is 1 of them. Shares of the fast-food helping slinger are present down 52% from their highest past fall, arsenic investors person been spooked by weakening user sentiment, disappointing 2025 guidance, and missing top-line estimates successful its fourth-quarter net report. A lofty valuation besides accelerated the sell-off, arsenic the banal was priced for perfection six months ago.

However, aft the terms reset, Wingstop looks acceptable up for an charismatic buying opportunity. Here are 3 reasons why.

Chicken tenders, fries, and soda from Wingstop,

In the restaurant industry, winners thin to support winning, and Wingstop's occurrence is simply a testament to that. The institution is easy the nation's largest fast-food helping concept, and its exemplary of opening successful B-level existent property locations, keeping costs debased for franchisees, and relying connected integer and transportation channels has paid off.

Wingstop has delivered 20 consecutive years of same-store income growth, a streak that includes the fiscal situation and the pandemic and is virtually unmatched successful the edifice industry. The institution has besides reported double-digit comparable-sales maturation successful galore of those quarters.

In fact, successful the 4th quarter, it posted 10.1% home same-store income maturation and 19.9% same-store income maturation for the year, connected apical of 18.3% successful 2023, giving it a two-year comp of much than 40%.

A edifice concatenation that's capable to turn astatine a complaint similar that intelligibly has a merchandise and marque that's resonating with its lawsuit base. Additionally, Wingstop has been capable to turn same-store income successful treble digits portion aggressively opening caller locations, showing that cannibalization has not been an issue.

Wingstop banal fell 13% connected Feb. 20, and continued to descent from determination arsenic the institution missed top-line estimates successful its fourth-quarter net study and offered disappointing guidance for 2025.

Management said that it expected low-to-mid-single-digit same-store income maturation successful 2025, a crisp slowdown from 19.9% successful 2024 oregon 10.1% successful the 4th quarter. On the net call, the institution explained that that guidance was chiefly owed to lapping precise beardown maturation successful 2024, including 20% maturation successful the archetypal 4th successful 2024.

However, full-year guidance to commencement the twelvemonth tends to beryllium blimpish for astir companies, and Wingstop has a signifier of doing that arsenic well. In fact, successful the 4th fourth of 2023, the institution guided for mid-single-digit comparable-sales growth, and intelligibly blew that distant with 20% comperable-sales growth.

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