WINGSTOP INC. (WING): what the price assumes

In the published model solve dated 2026-Q2, anchored at $123.77, WINGSTOP INC. (WING) is priced for +15.8% growth. boothcheck publishes no house fair value, target price, or buy/sell rating; individual model outputs and user-controlled scenarios are analytical inputs, not Boothcheck targets. Narrative composed 2026-06-28.

Generated: 2026-08-10 · Exported: 2026-08-12 · Source: https://boothcheck.com/report/WING

Headline

What The Price Assumes (Inversion)

The assumption today's price embeds, recovered by inverting the valuation.

The operating-margin figure is value-band context at year 5: derived from the framework's value band, a separate calculation — not part of the priced-in solve.

Solve inputs: computed at a 8.6% cost of capital with 4% terminal growth over a 5-year stage; each 1pp of cost of capital moves the implied operating-profit growth ~6.4pp.

How unusual the bet is: within-range

Valuation X-Ray

The price is justified by relative-multiple; earnings-power land below the price.

How the valuation models price the stock relative to the market price. Price/FV above 1.0 means the market pays more than that lens defends (expensive); at or below 1.0 the lens can defend the price.

Families that justify the price: Relative Families that call it expensive: Earnings

The models below discount at their own flat-beta convention rates (cost of equity 9.3%, WACC 7.7%); the inversion above states its own rate.

Per-Model Detail (n=3)

Economic-Unit Decomposition (Sum Of The Parts)

Only one reportable economic unit is present in the current topology source. Consolidated operating lenses remain available, but there is no multi-unit decomposition.

No total common-equity value is stated. One or more material units lack a supported unit value. The displayed values are an indicative subtotal; consolidated debt and cash cannot be applied to a fraction of the company.

Solvency

Interest expense is not separately reported in the latest filings, so interest coverage cannot be computed.

Bullet Takeaways

• Wingstop is almost entirely a franchisor, with about 98% of restaurants operated by franchisees, and its growth engine is unit count: 97 net new openings and 17% unit growth in the first quarter of 2026.
• The biggest risk is the gap between the price and the demand trend: domestic same-store sales fell 8.7% on lower transactions amid consumer spending pressure, even as the price embeds years of strong growth.
• What to watch is the promised comp recovery: management reaffirmed 15 to 16% global unit growth for 2026 and expects a return to positive same-store sales in the second half of the year.

Bull Case

The earnings trajectory tells the Wingstop story better than any single quarter, and the direction is up even through a soft patch. Total revenue grew 7.4% to $183.7 million in the first quarter, adjusted EBITDA rose 9.9% to $65.4 million, and adjusted EPS climbed 19.2% to $1.18, extending a multi-year pattern in which the royalty model compounds faster than the top line. The reason earnings grow faster than revenue is the structure: Wingstop is almost purely a franchisor, with roughly 98% of its restaurants operated by franchisees, so it collects royalties on system sales while franchisees carry the cost of building and running the stores. Full-year 2025 revenue reached $696.9 million, up 11.4%, and the asset-light model means most of each incremental royalty dollar drops toward profit.

The growth engine is new units, and it is running hard regardless of the demand cycle. The company opened 97 net new restaurants in the quarter for 17% unit growth, a pace few restaurant concepts sustain. Each new unit adds a perpetual royalty stream, so unit growth is the most durable form of growth a franchisor has, independent of how any single quarter's traffic trends. Wingstop reaffirmed guidance for 15 to 16% global unit growth in 2026, which means the system keeps expanding the royalty base even while comps are soft.

The digital franchise is the structural advantage that makes the long runway credible. Digital sales reached 72.5% of system-wide sales, an extraordinarily high figure for a restaurant chain. A business that takes nearly three-quarters of its orders digitally owns the customer relationship and the data, which improves marketing efficiency, order accuracy, and the ability to drive repeat frequency. That digital ownership is what management is leaning on to reaccelerate comps, and it is the reason the company can plausibly project a return to positive same-store sales in the second half of 2026. The bull case is a high-growth, asset-light, digitally dominant franchisor whose unit-growth runway and royalty model compound earnings through cycles.

Bear Case

The bear case is about a single dependency the price cannot escape: Wingstop is valued as if explosive growth continues indefinitely, and the most recent quarter put the first crack in that narrative. Domestic same-store sales fell 8.7%, driven by lower transaction volumes as consumers pulled back on spending. An 8.7% comp decline is not a rounding error; it means fewer people walked in or ordered, and for a concept whose entire valuation rests on relentless growth, a sharp negative comp is the most fragile assumption breaking. The company is still growing total revenue, but only because new units are offsetting falling sales at existing ones. Strip out the new-store contribution and the underlying demand trend at established restaurants is going the wrong way.

The specific assumption baked into the price is the second-half recovery. Management expects comps to return to positive growth in the second half of 2026 as operational and marketing strategies scale, and the valuation depends on that happening. If the consumer pullback persists and comps stay negative, the unit-growth math gets harder, because new franchisees build stores based on the returns existing stores generate, and weak comps eventually slow the development pipeline that drives the royalty base. The fast-casual category is also intensely competitive: the company competes on taste, price, value, convenience, digital engagement and delivery against many well-established chains, and value-seeking consumers in a soft economy have many cheaper options. Reliance on franchisees adds another layer, since a substantial portion of revenue depends on the performance of restaurants Wingstop does not operate.

The valuation leaves no room for the recovery to slip. At $161.84 (June 28, 2026) no family of method reaches the price, and the earnings-power lens, which capitalizes current profit with no growth, sits at a tiny fraction of the price, reflecting how completely the quote depends on future growth rather than present earnings. The peer-multiple methods land well below the price too. The price embeds operating-income growth above 25%, sustained, which is an aggressive assumption for any restaurant and a precarious one when comps just turned negative. Net debt of roughly $1.1 billion at nearly six times trailing operating income adds leverage on top. The bull and the bear agree the unit growth and digital mix are exceptional. They disagree on whether a price that assumes years of high-rate compounding can survive a stretch of negative same-store sales, or whether the narrative the price depends on is already fraying.

Valuation

Wingstop is priced as one of the great compounders in restaurants, and the inversion shows just how aggressive that bet is: at today's price the market is paying for operating income to grow above 25% a year, sustained, on top of an already high operating margin around 27%. That is a demanding assumption for any business, and it is the lens through which the soft first quarter has to be judged.

The method distribution is unambiguous: no family reaches the price. The earnings-power method, capitalizing today's profit with no growth, lands at a tiny fraction of the price, the starkest possible statement that the quote is almost entirely future growth and almost nothing present earnings. The peer-multiple methods, applying restaurant-sector multiples, land well below the price too. There is no asset-value floor to speak of for an asset-light franchisor. The pattern is a pure durability-and-growth premium: the static frames structurally cannot price a concept the market believes will keep opening units at 15%-plus and reaccelerating comps, so only a scenario beyond the conventional methods reaches the price. The premium is the entire investment question, and it is unusually large.

Leverage is a real consideration layered on the growth bet. Net debt of roughly $1.1 billion at nearly six times trailing operating income is a meaningful load for a franchisor, supported by the steady royalty cash flow but leaving less cushion if comps stay negative and the development pace slows. The decisive judgment for the value is not any single method's number; it is whether the second-half comp recovery management is guiding to actually arrives, and whether 15 to 16% unit growth holds. If comps reaccelerate and units keep opening, the premium is at least partly earned. If the consumer pullback persists and comps stay negative, the price is asking for growth the most recent quarter argued against, and the gap between the present earnings and the quote is enormous.

Catalysts

The first-quarter 2026 report on April 29 was a mixed catalyst: strong unit growth and earnings against a sharp comp decline. Total revenue grew 7.4% to $183.7 million, adjusted EBITDA rose 9.9% to $65.4 million, and adjusted EPS climbed 19.2% to $1.18, but domestic same-store sales fell 8.7% on lower transaction volumes amid consumer spending pressure. The company opened 97 net new restaurants for 17% unit growth, and digital sales reached 72.5% of system-wide sales. Management reaffirmed full-year 2026 guidance for 15 to 16% global unit growth while expecting a low-single-digit decline in domestic same-store sales for the year, with a return to positive comps anticipated in the second half.

The forward catalysts are entirely about the comp recovery and the pace of unit development. The single most important number in coming quarters is domestic same-store sales: the price is built on the second-half reacceleration, so each comp print directly tests the thesis. Unit growth against the 15 to 16% target is the other key metric, since new restaurants drive the royalty base, and the health of franchisee economics determines whether that development pipeline holds. The macro variable with the most leverage is the strength of the value-seeking consumer, whose pullback drove the transaction decline. The next earnings report is the event that shows whether the marketing and operational strategies management is counting on are beginning to turn comps positive.

Peer Cohorts (Per Segment, With Filing Citations)

Restaurant (consolidated) (reported)

• SHAK (SHAKE SHACK INC.)
• FY2025 10-K: …and new companies that compete directly and indirectly with us with respect to taste, menu, price, food quality, service, value, design, and location. We compete in the restaurant industry with multi-unit national, regional and locally-owned and/or operated limited-service restaurants, and full-service restaurants.…
• FY2025 10-K: …maturity and safeguarding guest and Company data and continue to invest in our security and technology infrastructure and enhancing threat detection capabilities. As artificial intelligence becomes more embedded in business operations, we expanded our governance framework for artificial intelligence technologies,…
• BROS (DUTCH BROS INC.)
• FY2025 10-K: …including coffee bean sales, Dutch Bros Rebel energy drink sales, and other sales, are recognized when shipped. Other Revenue Other revenue includes retail coffee and other food and beverage sales, recognized at the date of sale, as well as sales of products through our website, recognized at the point in time of…
• FY2025 10-K: …Stock Units QSR Quick Service Restaurant Dutch Bros Inc. | Form 10-K | 1 Table of Contents GLOSSARY TERM DEFINITION Reorganization Tax Receivable Agreement The Reorganization Tax Receivable Agreement among the Company and the Pre-IPO Blocker Holders entered into in connection with the reorganization transactions…
• CAVA (CAVA Group, Inc.)
• FY2025 10-K: …as a percentage of revenue; "Average Unit Volume" or "AUV" represents total revenue of operating CAVA Restaurants that were open for the entire trailing thirteen periods and Digital Kitchens sales for such period divided by the number of operating CAVA Restaurants that were open for the entire trailing thirteen…
• FY2025 10-K: …in the aggregate as we continue to expand our business but to decrease as a percentage of revenue in the long-term. Depreciation and amortization primarily consists of depreciation of assets related to CAVA restaurants and our production facilities, including leasehold improvements and equipment, as well as…
• WEN (Wendy's Co)
• FY2025 10-K: …sales during the week. Franchised restaurant average unit volumes includes sales by franchised restaurants, which are reported by our franchisees and represent their revenue from sales at franchised Wendy's restaurants. The Company's consolidated financial statements do not include sales by franchised restaurants to…
• FY2025 10-K: TES TO CONSOLIDATED FINANCIAL STATEMENTS (In Thousands Except Per Share Amounts) (a) Excludes funds collected from the sale of gift cards, which are primarily reimbursed to franchisees upon redemption at franchised restaurants and do not ultimately result in the recognition of revenue in the Company's consolidated…
• YUM (YUM! BRANDS, INC.)
• FY2025 10-K: …(loss) (c) 48 Unallocated Other income (expense) ( 3 ) Consolidated Operating Profit 2,574 Investment income (expense), net 1 Other pension income (expense) 2 Interest expense, net ( 501 ) Income before income taxes $ 2,077 103 Other Segment Disclosures KFC Division Taco Bell Division Pizza Hut Division Habit Burger…
• FY2025 10-K: …restaurants remain in our unit count (see below). Same-store sales growth excludes, for subsidiaries operating on a monthly calendar, the extra day resulting from a leap year and excludes, for subsidiaries operating on a weekly periodic calendar, the last week of the year in fiscal years with 53 weeks. We believe…
• QSR (RESTAURANT BRANDS INTERNATIONAL INC.)
• FY2025 10-K: …meets our definition of a restaurant that will be included in our net restaurant growth, we consider factors such as scope of operations, format and image, separate franchise agreement, and minimum sales thresholds. We refer to restaurants that do not meet our definition as "alternative formats" and we believe these…
• FY2025 10-K: Restated 2014 Omnibus Plan Incorporated herein by reference to Exhibit 10.36(i) to the Form 10-K of Registrant filed on February 22, 2023. 109 Table of Contents 10.14(d)* Form Restricted Stock Unit Agreement (2023) under the Amended and Restated 2014 Omnibus Plan Incorporated herein by reference to Exhibit 10.36(j) to…
• CMG (CHIPOTLE MEXICAN GRILL, INC.)
• FY2025 10-K: …or more frequently as circumstances warrant. We recognize revenue associated with Chipotle Rewards within food and beverage revenue on the consolidated statements of income and comprehensive income when a guest redeems an earned reward. Deferred revenue associated with Chipotle Rewards is included in unearned revenue…
• FY2025 10-K: …operating segment is comprised of all 11 operating segments located in the United States, which we have aggregated to a single operating segment in consideration of the aggregation criteria set forth in ASC 280. All other operating segments, which comprise our operations in Canada, Europe and international…
• TXRH (Texas Roadhouse, Inc.)
• FY2025 10-K: …company operating predominantly in the casual dining segment. Our late founder, W. Kent Taylor, started the business in 1993 with the opening of the first Texas Roadhouse restaurant in Clarksville, Indiana. The Company maintains three restaurant concepts operating as Texas Roadhouse, Bubba's 33, and Jaggers. As of…
• FY2025 10-K: …Subsidiaries Consolidated Statements of Income (in thousands, except per share data) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Fiscal Year Ended ​ ​ ​ ​ December 30, ​ ​ ​ December 31, ​ ​ ​ December 26, ​ ​ ​ ​ 2025 ​ 2024 ​ 2023 Revenue: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Restaurant and other sales ​ ​ $ 5,847,234 ​ $ 5,341,853 ​ $…

Methodology Note

• Priced-in inversion: the valuation is inverted on the current price to recover the operating-income growth, duration, and steady-state margin the price embeds (ROE for financials, FFO growth for REITs).
• Valuation x-ray: the valuation models, grouped into four families (asset, earnings, relative, growth). Each model is expressed as a price/FV ratio (distance from price), not a point fair-value estimate. The spread across families is the disagreement.
• Economic-unit decomposition (SOTP): each disclosed business unit is assigned its native valuation basis before any multiple is applied. Operating units are valued on enterprise value; funded financial units are valued on their own common equity, because their borrowings fund earning assets rather than levering the parent. A company total is stated only once every material unit carries a supported value and the parent capital bridge reconciles.
• Solvency: net cash/debt, net-debt-to-NOPAT, interest coverage, and share-count CAGR from EDGAR financials (net debt / FFO and fixed-charge coverage for REITs; regulatory-capital framing for financials).
• Peer cohorts: per-segment comparables with deep-linkable SEC filing citations.

Fundamentals sourced from SEC EDGAR filings. Current price from Databento. The priced-in inversion and valuation x-ray are computed by the boothcheck engine; narrative composed by AI from the structured data.