Key insights
- The author believes Wingstop (WING) is undervalued based on strong unit economics, international growth potential, and a successful franchise model. The company has exceeded analyst forecasts for store growth and same-store sales. The author highlights the low-risk, high-growth nature of the business due to its franchise structure and strong management, suggesting a bullish outlook for the stock.
I did a lot of dd on wing last year and just wanted to take a look at their hurdle performance now about a year later. My model showed that analysts had the stock price really rallying from a huge amount of new stores, with a huge runway internationally. Last year analysts had total stores forecasted to be about 2900 this year when now they are at over 3000. Unit economics are strongest in the fast food industry. Same store sales growth lapped HUGE numbers over and over again. Theres a huge avg distance between each store so adding more stores wont cause cannibilization for quite some time (unlike mcdonalds or tim hortons where theres one every block). New stores have seen greater and greater first year sales every year for ;ike 20 YEARS - that is insane. They have surpassed every forecasted metric imaginable yet the stock price shows the opposite. Biggest deep value play i see rn. Also 99% franchised, no debt, and franchises pay for advertising through the ad fund, low risk setup for equity holders. Also great management team.