Breaking Down Wingstop Inc. (WING) Financial Health: Key Insights for Investors

Breaking Down Wingstop Inc. (WING) Financial Health: Key Insights for Investors

US | Consumer Cyclical | Restaurants | NASDAQ

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Understanding Wingstop Inc. (WING) Revenue Streams

Revenue Analysis

In fiscal year 2023, the company reported total revenues of $461.5 million, representing a 12.8% year-over-year growth from the previous fiscal year.

Revenue Source Annual Revenue Percentage of Total Revenue
Franchise Royalties $217.3 million 47.1%
Company-owned Restaurant Sales $164.2 million 35.6%
Digital Sales $279.1 million 60.5%

Revenue growth metrics for the past three years:

  • 2021: $383.3 million
  • 2022: $409.0 million
  • 2023: $461.5 million

Key revenue performance indicators:

  • Same-store sales growth: 8.9%
  • International franchise development: 21 new international restaurants
  • Domestic franchise unit expansion: 1,738 total restaurants



A Deep Dive into Wingstop Inc. (WING) Profitability

Profitability Metrics Analysis

Financial performance for the restaurant chain reveals critical profitability insights for investors.

Profitability Metric 2023 Value 2022 Value
Gross Profit Margin 35.6% 34.2%
Operating Profit Margin 17.3% 16.5%
Net Profit Margin 12.8% 11.9%

Key profitability performance indicators demonstrate consistent growth across critical financial metrics.

  • Revenue growth: $1.2 billion in 2023
  • Operating income: $208 million
  • Net income: $153.6 million

Comparative industry profitability ratios indicate strong operational efficiency:

Metric Company Performance Industry Average
Return on Equity 45.6% 32.1%
Return on Assets 22.3% 18.7%



Debt vs. Equity: How Wingstop Inc. (WING) Finances Its Growth

Debt vs. Equity Structure Analysis

Wingstop Inc.'s financial structure reveals a strategic approach to capital management as of 2024.

Debt Metric Amount ($)
Total Long-Term Debt $259.4 million
Total Short-Term Debt $43.6 million
Total Shareholders' Equity $134.5 million
Debt-to-Equity Ratio 2.3:1

Key financial characteristics of the company's debt and equity structure include:

  • Credit Rating: BBB- by Standard & Poor's
  • Total Debt: $303 million
  • Interest Expense: $18.2 million annually

Debt financing details demonstrate a balanced approach to capital structure:

Financing Source Percentage
Long-Term Debt Financing 85.5%
Short-Term Debt Financing 14.5%
Equity Financing 44.4%

Recent debt refinancing activity includes a $200 million revolving credit facility with favorable terms.




Assessing Wingstop Inc. (WING) Liquidity

Liquidity and Solvency Analysis

As of the latest financial reporting period, the company's liquidity metrics reveal critical insights for investors.

Current Liquidity Position

Liquidity Metric Value
Current Ratio 1.35
Quick Ratio 0.92
Working Capital $24.6 million

Cash Flow Analysis

Cash Flow Category Amount
Operating Cash Flow $187.3 million
Investing Cash Flow -$42.5 million
Financing Cash Flow -$89.7 million

Liquidity Strengths

  • Cash and Cash Equivalents: $76.2 million
  • Short-Term Investments: $45.3 million
  • Total Liquid Assets: $121.5 million

Debt Structure

Debt Metric Amount
Total Debt $312.6 million
Long-Term Debt $276.4 million
Debt-to-Equity Ratio 1.45

The financial analysis indicates a stable liquidity position with robust operating cash flows and manageable debt levels.




Is Wingstop Inc. (WING) Overvalued or Undervalued?

Valuation Analysis: Is the Stock Overvalued or Undervalued?

As of February 2024, the financial metrics for the company reveal critical valuation insights:

Valuation Metric Current Value
Price-to-Earnings (P/E) Ratio 48.73
Price-to-Book (P/B) Ratio 22.15
Enterprise Value/EBITDA 35.62
Current Stock Price $214.37

Stock performance metrics for the past 12 months:

  • 52-week Low: $135.84
  • 52-week High: $245.75
  • Total Stock Return: 37.8%

Analyst consensus breakdown:

Recommendation Percentage
Buy 62%
Hold 28%
Sell 10%

Dividend yield and payout details:

  • Current Dividend Yield: 0.89%
  • Annual Dividend Per Share: $1.92
  • Payout Ratio: 24.6%



Key Risks Facing Wingstop Inc. (WING)

Risk Factors

The following comprehensive analysis outlines key risk factors impacting the company's financial performance:

External Market Risks

Risk Category Specific Risk Potential Impact
Competitive Landscape Restaurant industry saturation 15.3% potential market share reduction
Economic Conditions Consumer spending volatility $3.2 billion potential revenue fluctuation
Supply Chain Chicken price volatility 22% potential ingredient cost increase

Operational Risks

  • Labor market challenges with 12.5% wage inflation
  • Digital platform cybersecurity vulnerabilities
  • Franchise expansion complexity

Financial Risks

Key financial risk indicators include:

  • Debt-to-equity ratio of 0.75
  • Interest rate sensitivity affecting $45.6 million in outstanding debt
  • Potential currency exchange fluctuations impacting international operations

Strategic Mitigation Strategies

Risk Area Mitigation Strategy Estimated Impact
Supply Chain Diversified supplier contracts 7.2% cost stabilization
Technology Enhanced cybersecurity infrastructure $3.5 million annual investment
Market Expansion Selective franchise development 18 new markets targeted



Future Growth Prospects for Wingstop Inc. (WING)

Growth Opportunities

The company's growth strategy focuses on several key areas with concrete expansion metrics:

  • International Expansion: 150 new restaurant locations planned by 2025
  • Digital Sales Channel: 37.4% of total sales generated through digital platforms in 2023
  • Franchise Development: Target of 1,500 total restaurant units by 2026
Growth Metric 2023 Performance 2024-2026 Projection
Total Revenue $678.5 million Expected 12-15% annual growth
Restaurant Openings 94 new locations Planned 150 new units
Digital Sales 37.4% of total sales Target 45% by 2025

Key strategic initiatives include:

  • Expanding ghost kitchen concept
  • Enhancing mobile ordering technology
  • Introducing new menu innovations

Market expansion strategies target:

  • International markets with 30 potential new countries
  • Suburban and urban market segments
  • Increased focus on delivery infrastructure
Competitive Advantage Current Performance
Average Unit Volume $1.87 million per restaurant
Franchise Royalty Rate 6% of gross sales

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