Wingstop Inc. (WING) research, news, and more from GeoInvesting

Company description

Tue, 05 Apr 2016 13:22:27 GMT

Wingstop Inc., together with its subsidiaries, franchises and operates restaurants under the Wingstop brand name. Its restaurants offer cooked-to-order, hand-sauced, and tossed chicken wings. As of December 26, 2015, the company operated 845 restaurants in the United States, Indonesia, Mexico, the Philippines, Russia, Singapore, and the United Arab Emirates. Wingstop Inc. was founded in 1994 and is headquartered in Dallas, Texas.

Research

Tue, 09 Aug 2016 15:47:40 GMT

WING ($29.10) priced an offering of 6M shares after hours yesterday at $29.25 versus a close near $30. The offering is at about a 2.5% discount to market, will dilute the total outstanding share count by about 21%, and is being underwritten by Barclays.

Research

Wed, 27 Apr 2016 15:45:47 GMT

BWLD and CMG Misses Further Support $WING Thesis

On April 6, 2016, we wrote an article calling for 30-40% downside in WING just weeks ago. Shares of WING are up since our report, but we still believe in the bearish thesis. One of the main reasons we cited for our call was the bubble that the restaurant sector is experiencing has led to absurd valuations in stocks like $PNRA and $CMG. These valuations are then treated like the norm in the sector. We questioned WING’s ability to grow into its valuation and made similar points about other names in the sector, like BWLD. BWLD’s negative comp sales number posted yesterday has it down 10% in the pre-market session, supporting our case for an eventual WING “reality check” when it's multiple eventually contracts.

Research

Tue, 05 Apr 2016 15:33:33 GMT

We wanted to let members know that tomorrow we will be publishing a small public note on $WING laying out our reasons as to why we believe it's a good short here at $23.77. The short thesis has already been written about, but we wanted to add several points of our own.

As we sometimes do, and as we have done in the past with our report on David's Tea (DTEA), we are pointing out what we believe to be a common sense short scenario that has already been opined on at length. We want to point out some great work that’s already been done and then follow up with some of our own thoughts.

Preliminary reading of this Seeking Alpha article published days ago is a good starting point and lays out several points that we make. In addition, we make the case that the fast casual dining sector is in a bubble and that WING is going to have trouble growing into its 45X PE multiple. Here’s where WING stands compared to some notable names in the fast food and fast casual industry.

Our article draws on comparisons from the industry, pointing out the reality checks that companies like SHAK and LOCO also saw in their multiples after coming out of the IPO gate screaming.