Wingstop franchises and operates restaurants under the Wingstop name that specialize in cooked-to-order, hand-sauced, and tossed chicken wings. The company was founded in 1994 and is based in Dallas, Texas.
WING Price Forecast Based on DCF Valuation
DCF Fair Value Target:
Below please find a table outlining a discounted cash flow forecast for WING, in which we model out valuation assuming a variety of terminal growth rates. To summarize, we found that Wingstop Inc ranked in the 37th percentile in terms of potential gain offered. We should note, though, that all scenearios modelled for this stock suggest it is overvalued. The most interesting components of our discounted cash flow analysis for Wingstop Inc ended up being:
The compound growth rate in the free cash flow of Wingstop Inc over the past 4.67 years is 0.42%; that's better than 79.02% of cash flow producing equities in the Consumer Cyclical sector, where it is classified.
93% of the company's capital comes from equity, which is greater than 79.08% of stocks in our cash flow based forecasting set.
The business' balance sheet suggests that 7% of the company's capital is sourced from debt; this is greater than only 20.88% of the free cash flow producing stocks we're observing.
Terminal Growth Rate in Free Cash Flow
Return Relative to Current Share Price
For other companies in the Consumer Cyclical that have a similar discounted cashflow valuation profile (and ensuing price forecasts) as WING, try TALN, THRM, BOOT, CCK, and CULP.
What a run it's been for investors in Wingstop (NASDAQ: WING). In the process, it's outperformed Wall Street's favorite restaurant stocks like Dominos Pizza, Chipotle, and Starbucks. Here's what you need to know before buying Wingstop stock.