<!-- HTML_TAG_START -->NasdaqGS:WING Earnings and Revenue Growth January 11th 2025<!-- HTML_TAG_END -->
While Wingstop Inc. (NASDAQ:WING) might not have the largest market cap around , it saw significant share price movement during recent months on the NASDAQGS, rising to highs of US$423 and falling to the lows of US$275. Some share price movements can give investors a better opportunity to enter into the stock, and potentially buy at a lower price. A question to answer is whether Wingstop’s current trading price of US$275 reflective of the actual value of the mid-cap? Or is it currently undervalued, providing us with the opportunity to buy? Let’s take a look at Wingstop’s outlook and value based on the most recent financial data to see if there are any catalysts for a price change.
View our latest analysis for Wingstop
Wingstop is currently expensive based on our price multiple model, where we look at the company’s price-to-earnings ratio in comparison to the industry average. We’ve used the price-to-earnings ratio in this instance because there’s not enough visibility to forecast its cash flows. The stock’s ratio of 79.62x is currently well-above the industry average of 22.69x, meaning that it is trading at a more expensive price relative to its peers. But, is there another opportunity to buy low in the future? Given that Wingstop’s share is fairly volatile (i.e. its price movements are magnified relative to the rest of the market) this could mean the price can sink lower, giving us another chance to buy in the future. This is based on its high beta, which is a good indicator for share price volatility.
Future outlook is an important aspect when you’re looking at buying a stock, especially if you are an investor looking for growth in your portfolio. Buying a great company with a robust outlook at a cheap price is always a good investment, so let’s also take a look at the company’s future expectations. With profit expected to grow by 90% over the next couple of years, the future seems bright for Wingstop. It looks like higher cash flow is on the cards for the stock, which should feed into a higher share valuation.
Are you a shareholder? WING’s optimistic future growth appears to have been factored into the current share price, with shares trading above industry price multiples. However, this brings up another question – is now the right time to sell? If you believe WING should trade below its current price, selling high and buying it back up again when its price falls towards the industry PE ratio can be profitable. But before you make this decision, take a look at whether its fundamentals have changed.
