Wingstop Stock (WING): Should I Buy It Now?

By Amit Chowdhry ● July 30, 2020
  • Should you buy Wingstop Inc (NASDAQ: WING) now? Here is some information to help you decide.

On Wednesday, July 29, 2020, the stock of Wingstop Inc (NASDAQ: WING) closed 16.72% higher than the previous day. The shares of Wingstop increased after the company released the results for Q2 2020 and it revealed that revenue increased 36% year-over-year while net income grew substantially at 135%.

Wingstop’s revenue for the quarter increased to $66 million. Systemwide sales increased 37% year over year to $509 million due to new restaurants and comparable sales growth.

For the quarter, Wingstop added 23 net restaurants, of which most opened in June. And Wingstop is expecting restaurant development to continue growing with plans to open 120 to 130 new locations in 2020.

Due to the economic crisis and the pandemic, many restaurants have been shutting down and going out of business. But a majority of Wingstop orders are either delivery or carry-out so business has been booming for the franchise chicken wing restaurant.

“I am very proud of our team members and brand partners and the extraordinary results we achieved against a challenging backdrop. We benefited from a steadfast focus on expanding our digital business and leveraging delivery to make it seamless for fans to access the craveable flavors of our fresh, cook-to-order wings, fries and sides,” said Charlie Morrison, Chairman and Chief Executive Officer of Wingstop. “Despite the unprecedented circumstances, we opened 23 net new restaurants which highlights the excitement of our brand partners to grow with Wingstop and the strength of the unit level economics. We believe we are well positioned to continue making progress towards our vision of becoming a top 10 global restaurant brand.”

About a month ago, Wingstop opened its first ghost kitchen in its home city of Dallas, Texas. And now it is running two ghost kitchens in the United Kingdom. The ghost kitchen based in Dallas measures at about 400 square feet, which is less than a quarter of the size of average Wingstop locations.

Wingstop Stock: Should You Buy It Now?

Wingstop has been driving solid returns for investors as the stock price is up over 30% from 3 months ago and 60% from 6 months ago. The year-to-date stock growth is over 80% and it is up over 58% over the last one year. Since going public, the company’s stock increased by over 447%.

In an analyst recommendation report I read, 4 analysts said strong buy; 7 say buy; 9 say neutral; 0 say sell; and 0 say strong sell.

Due to all of these numbers, I am very bullish on the stock for the long-term.

Disclosure: I own a small number of Wingstop shares in my portfolio