Value
5.2/10data confidence 100%| Component | Sub-score |
|---|---|
| P/E | 3.9 |
| P/S | 6.8 |
| EV/EBITDA | 0.0 |
| Fwd P/E | 5.2 |
| PEG | 4.5 |
| Analyst target | 9.0 |
- ▸Forward P/E: 24.3x
- ▸PEG: 2.00
WING · Why this verdict
Why Wingstop (WING) is rated SELL
Updated
Model-generated analysis — not investment advice. Not a registered investment advisor. Past performance does not guarantee future results.
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VerdictSELL
Overall score5.3/10
ConfidenceMEDIUM
MacroNEUTRAL
TrendMatrix Research · core thesis
Engine thesis — one sentence
Wingstop has delivered 4 consecutive earnings beats averaging 15.7% positive surprise, carries a quality score of 7.7 with best-in-class peer margins, and analysts project 27% upside — but a single distributor concentration risk, 19% short interest, and a confirmed death cross with the stock near its 52-week low create a recovery-pattern entry where patience and risk management matter.
Falsifiable statement — pillar-level invalidators below. Engine-derived; not personalized advice.
Thesis pillars
| Pillar | Expectation | Trend |
|---|---|---|
Wingstop has beaten earnings estimates in all 4 of the last 4 quarters, with an average positive surprise of 15.7% — a consistent execution record that indicates the company is managing its cost structure and same-store sales effectively against conservative consensus estimates. Earnings | The earnings beat streak extends to at least 6 consecutive quarters, with average positive surprise remaining above 10% over the next 2 reported quarters. | ↓Deteriorating |
| CounterWith 19% short interest, sophisticated investors are betting against the stock despite the beat streak; the shorts may see upcoming cost pressures from the single distributor relationship or slowing traffic that consensus does not yet reflect. | ||
Wingstop earns a quality score of 7.7 with best-in-class margins among peers, a Piotroski score of 8 out of 9, and strong free cash flow conversion at 78% of net income — reflecting a franchise model where royalty-based revenue flows directly to the bottom line with minimal capital requirements. Quality breakdown | Quality score remains above 7.0 for the next 2 reported annual periods, with operating margin sustained above 15% and Piotroski score at 7 or higher. | →Stable |
| CounterThe franchise model's apparent high quality depends heavily on unit-level economics at franchisee locations; if average unit volumes decline due to consumer spending pressure, franchise closures could accelerate and royalty revenue would fall. | ||
Wingstop sources through a single distributor for its supply chain, representing a high-severity concentration risk identified in the 10-K filing — any disruption to this distributor relationship could create near-term inventory and cost disruptions across the franchise system. Bear case | The company maintains continuity with its single distributor for at least the next 12 months, with no announced distribution disruption, supply shortage, or contract renegotiation resulting in cost increases above 5%. | ↓Deteriorating |
| CounterSingle-distributor relationships in restaurant supply chains often reflect preferred pricing and reliability agreements; the concentration risk may be mitigated by the contractual nature of the relationship and the distributor's scale. | ||
Wingstop's price is near its 52-week low with a confirmed death cross (exempted by quality momentum), a moving average slope of -11.1% per 30 days, and the stock at the bottom of its Bollinger band — indicating the recovery thesis requires substantial price reversal from a technically damaged setup. Momentum breakdown | Price rises above $190, more than 14% above the current $166.22, as the 200-day moving average begins to recover and the stock clears the death cross condition within 12 months. | Tripped↑Improving |
| CounterThe death cross has been exempted by the quality and momentum scores — both quality at 7.7 and momentum at 6.5 are above exemption thresholds — meaning the system recognizes this as a recovery opportunity in a quality name rather than a structural breakdown. | ||
Wingstop has beaten earnings estimates in all 4 of the last 4 quarters, with an average positive surprise of 15.7% — a consistent execution record that indicates the company is managing its cost structure and same-store sales effectively against conservative consensus estimates.
↓DeterioratingEarnings
- Expectation
- The earnings beat streak extends to at least 6 consecutive quarters, with average positive surprise remaining above 10% over the next 2 reported quarters.
CounterWith 19% short interest, sophisticated investors are betting against the stock despite the beat streak; the shorts may see upcoming cost pressures from the single distributor relationship or slowing traffic that consensus does not yet reflect.
Wingstop earns a quality score of 7.7 with best-in-class margins among peers, a Piotroski score of 8 out of 9, and strong free cash flow conversion at 78% of net income — reflecting a franchise model where royalty-based revenue flows directly to the bottom line with minimal capital requirements.
→StableQuality breakdown
- Expectation
- Quality score remains above 7.0 for the next 2 reported annual periods, with operating margin sustained above 15% and Piotroski score at 7 or higher.
CounterThe franchise model's apparent high quality depends heavily on unit-level economics at franchisee locations; if average unit volumes decline due to consumer spending pressure, franchise closures could accelerate and royalty revenue would fall.
Wingstop sources through a single distributor for its supply chain, representing a high-severity concentration risk identified in the 10-K filing — any disruption to this distributor relationship could create near-term inventory and cost disruptions across the franchise system.
↓DeterioratingBear case
- Expectation
- The company maintains continuity with its single distributor for at least the next 12 months, with no announced distribution disruption, supply shortage, or contract renegotiation resulting in cost increases above 5%.
CounterSingle-distributor relationships in restaurant supply chains often reflect preferred pricing and reliability agreements; the concentration risk may be mitigated by the contractual nature of the relationship and the distributor's scale.
Wingstop's price is near its 52-week low with a confirmed death cross (exempted by quality momentum), a moving average slope of -11.1% per 30 days, and the stock at the bottom of its Bollinger band — indicating the recovery thesis requires substantial price reversal from a technically damaged setup.
Tripped↑ImprovingMomentum breakdown
- Expectation
- Price rises above $190, more than 14% above the current $166.22, as the 200-day moving average begins to recover and the stock clears the death cross condition within 12 months.
CounterThe death cross has been exempted by the quality and momentum scores — both quality at 7.7 and momentum at 6.5 are above exemption thresholds — meaning the system recognizes this as a recovery opportunity in a quality name rather than a structural breakdown.
Per-dimension breakdown
Quality
7.7/10data confidence 100%| Component | Sub-score |
|---|---|
| ROA | 10.0 |
| Gross margin | 5.8 |
| Op margin | 10.0 |
| Net margin | 7.9 |
| Current ratio | 7.7 |
| FCF quality | 5.9 |
| Moat | 5.6 |
| Piotroski F | 8.9 |
- ▸Strong margins: 16%
- ▸Earnings quality warning: 78% FCF/NI
- ▸Strong Piotroski F-Score: 8/9
- ▸High-quality business
Growth
2.1/10data confidence 67%| Component | Sub-score |
|---|---|
| Rev growth | 4.3 |
| EPS growth | 0.0 |
Momentum
3.3/10data confidence 100%| Component | Sub-score |
|---|---|
| RSI | 3.0 |
| MACD | 0.0 |
| OBV | 10.0 |
| MA position | 1.0 |
| Volume | 2.5 |
- ▸Capitulation risk (RSI 12, below 200MA)
- ▸Volume accumulation (rising OBV)
- ▸Below 200-MA, MA slope -8.1%/30d — confirmed downtrend
Sentiment
8.3/10data confidence 100%| Component | Sub-score |
|---|---|
| LLM sentiment | 6.0 |
| Analyst rating | 9.0 |
| Price target | 9.8 |
- ▸Analyst upside: 70%
Insider
5.7/10data confidence 75%| Component | Sub-score |
|---|---|
| materiality | 5.0 |
| holder change | 7.1 |
| notable moves | 5.0 |
- ▸Negligible insider selling — $31,482 (0.001% of mkt cap)
Peer rank
5.3/10data confidence 80%| Component | Sub-score |
|---|---|
| value rank | 2.1 |
| quality rank | 9.0 |
| growth rank | 5.0 |
- ▸Best-in-class margins
Technical
5.9/10data confidence 100%| Component | Sub-score |
|---|---|
| bollinger | 8.2 |
| support resistance | 9.6 |
| 52w position | 0.0 |
Risk (lower is worse)
2.8/10data confidence 100%| Component | Sub-score |
|---|---|
| short interest | 1.5 |
| days to cover | 6.7 |
| volatility | 0.0 |
| put call | 4.1 |
| implied vol | 0.0 |
| max pain risk | 3.0 |
| beta | 4.1 |
- ▸High short interest: 17%
- ▸High IV: 97%
- ▸Above max pain $90
- ▸Concentration risks: 1 HIGH, 1 MED (10-K Item 1A — sized via position_sizing, validated via buy_confidence)
Catalyst
7.2/10data confidence 100%| Component | Sub-score |
|---|---|
| erm | 5.0 |
| earnings history | 10.0 |
| earnings timing | 5.0 |
| surprise avg | 10.0 |
| dividend safety | 8.5 |
| news activity | 5.0 |
- ▸Perfect beat streak: 4Q
- ▸Earnings in 3 days
- ▸Dividend aristocrat: 0.9% yield
How the verdict was assembled
Engine trigger
Extreme risk factors.
Engine technical detail
verdict_path:
L1:HARD_BLOCK:RISK_FLOORPassed (5)
- ASYMMETRY:4.1>=1.5
- INSIDER:OK
- 8K:CLEAN
- SEMI_CYCLE_PEAK:CLEAR
- MATERIALS_CYCLE_PEAK:CLEAR
Failed (3)
- MOMENTUM:3.3<4.5
- DEATH_CROSS:HARD_BLOCK
- EARNINGS_PROXIMITY:3d<=7d
Warning (0)
none
Reward-to-Risk
4.06
Upside
+52.7%
Downside
13.0%
Sizing output
AVOID
SetupFalling Knife — Death cross, below all MAs, RSI 12, MACD bearish
EdgeTemporary headwind — High quality (7.7) with weak momentum (3.3)
SuitabilitySpeculative — Drawdown -64% (>40% off 52w high)
Investment implication
The SELL_IF_HOLDING verdict reflects the MOMENTUM gate's 3.3<4.5 outcome against Sentiment at 8.3 and asymmetric R:R of 4.06.
The strongest dimensions are Sentiment at 8.3, Quality at 7.7, and Catalyst at 7.2; the weakest are Growth at 2.1, Risk (lower is worse) at 2.8, and Momentum at 3.3. The V9 engine flagged 3 failed gates, producing an asymmetric reward-to-risk of 4.06 and an engine sizing output of AVOID.
What would invalidate the thesis
Falsifying conditions — when triggered, the corresponding pillar's thesis is invalidated.
- P1Perfect Earnings Beat Streak
Trip ifEarnings surprise falls below 0% in at least 2 of the next 4 reported quarters.
- P2High Quality Asset Light Model
Trip ifOperating margin falls below 12% or Piotroski score falls below 6 for at least 2 consecutive reported periods.
- P3Single Distributor Concentration Risk
Trip ifA supply disruption from the single distributor causes same-store sales to decline by more than 5% in any single reported quarter.
- P4Death Cross Near 52 Week LowTripped
Trip ifPrice drops below $140, more than 16% below the current $166.22, while the 200-day moving average slope remains negative for more than 60 trading days.