Fact based stock research
Wendy's (NasdaqGS:WEN)
US95058W1009
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For every stock, we judge its performance against its peers and rank it on a scale of 1 to 100. The higher the rank, the better the stock performs than its peers. And, we do this for six investment strategies:
Value - shows how good of a value the stock is. Green is "inexpensive"; red is "expensive".
Growth - shows a company's growth potential. Green is "high growth" expected; red is "tough times ahead".
Safety - relates to the amount of debt a company has. Green is low debt level; red is high debt level.
Combined Financial - this isn't an average of the first three ranks but rather a consolidated view across several financial indicators. Green = good; red = tread carefully.
(NEW) Sentiment - quantifies professional analyst ratings and holdings as well as market pulse. Green = positive sentiment; red = skepticism (Only available to Premium Subscribers).
(NEW) 360° View - the ultimate rating with all financial and non-financial indicators.
Wendy's stock research in summary
ANALYSIS: With an Obermatt Combined Rank of 59 (better than 59% compared with investment alternatives), Wendy's (Restaurants, USA) shares have above-average financial characteristics compared with similar stocks. Shares of Wendy's are low in value (priced high) with a consolidated Value Rank of 49 (worse than 51% of alternatives) and show below-average growth (Growth Rank of 35) but are safely financed (Safety Rank of 74), which means low debt burdens. ...read more
RECOMMENDATION: A Combined Rank of 59, is a buy recommendation based on Wendy's's financial characteristics. As the company Wendy's's critical financial metrics exhibit below-average performance, such as low value (Obermatt Value Rank of 49) and low growth (Obermatt Growth Rank of 35), it is a somewhat questionable stock investment, where the risk of paying too much for the shares is significant, unless the company has an exceptionally bright future. In this case, good financing practices (Obermatt Safety Rank of 74) are a positive sign, because it may allow the company to weather challenging times until the hoped-for cash flows materialize. This may be true for high-tech or biotechnology companies with enough cash to sustain prolonged business development. If they own properties that only provide cash flows in the future, the stock may look excessively expensive and unattractive today. In such cases, the Obermatt Method has limited value, as it is based on facts we can observe today. If the facts lie all in the future, stock investing becomes guesswork, and this should only be a driver in a limited number of investments that account for a small fraction of a safe portfolio. Obermatt Premium subscribers can further check the stock’s Sentiment Ranks, which also flow into the Obermatt 360° View for investors. ...read more
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360° Viewnew| Country | USA |
| Industry | Restaurants |
| Index | Dividends USA, Diversity USA, NASDAQ, S&P MIDCAP |
| Size class | Large |
This stock has achievements: Top 10 Stock.
14-Nov-2024. Stock data may be delayed. Log in or sign up to get the most recent research.
Analysts rarely agree on a stock’s future. So, who do you believe? Obermatt translates those collective views into a single Sentiment Rank. That plus the financial ranks give you the ultimate 360° View. Sign up to access them.
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Review the performance ranks of the individual metrics that form each investment strategy.
Research History: Wendy's
| RESEARCH HISTORY | 2021 | 2022 | 2023 | 2024 | ||||
|---|---|---|---|---|---|---|---|---|
| VALUE | ||||||||
| VALUE | 28 |
|
45 |
|
59 |
|
49 |
|
| GROWTH | ||||||||
| GROWTH | 62 |
|
11 |
|
25 |
|
35 |
|
| SAFETY | ||||||||
| SAFETY | 14 |
|
75 |
|
66 |
|
74 |
|
| SENTIMENT | ||||||||
| SENTIMENT | n/a |
|
58 |
|
73 |
|
new |
|
| 360° VIEW | ||||||||
| 360° VIEW | n/a |
|
37 |
|
62 |
|
new |
|
Combined financial peformance in Detail
ANALYSIS: With an Obermatt Combined Rank of 59 (better than 59% compared with investment alternatives), Wendy's (Restaurants, USA) shares have above-average financial characteristics compared with similar stocks. Shares of Wendy's are low in value (priced high) with a consolidated Value Rank of 49 (worse than 51% of alternatives) and show below-average growth (Growth Rank of 35) but are safely financed (Safety Rank of 74), which means low debt burdens. ...read more
RECOMMENDATION: A Combined Rank of 59, is a buy recommendation based on Wendy's's financial characteristics. As the company Wendy's's critical financial metrics exhibit below-average performance, such as low value (Obermatt Value Rank of 49) and low growth (Obermatt Growth Rank of 35), it is a somewhat questionable stock investment, where the risk of paying too much for the shares is significant, unless the company has an exceptionally bright future. In this case, good financing practices (Obermatt Safety Rank of 74) are a positive sign, because it may allow the company to weather challenging times until the hoped-for cash flows materialize. This may be true for high-tech or biotechnology companies with enough cash to sustain prolonged business development. If they own properties that only provide cash flows in the future, the stock may look excessively expensive and unattractive today. In such cases, the Obermatt Method has limited value, as it is based on facts we can observe today. If the facts lie all in the future, stock investing becomes guesswork, and this should only be a driver in a limited number of investments that account for a small fraction of a safe portfolio. Obermatt Premium subscribers can further check the stock’s Sentiment Ranks, which also flow into the Obermatt 360° View for investors. ...read more
| RESEARCH HISTORY | 2021 | 2022 | 2023 | 2024 | ||||
|---|---|---|---|---|---|---|---|---|
| VALUE | ||||||||
| VALUE | 28 |
|
45 |
|
59 |
|
49 |
|
| GROWTH | ||||||||
| GROWTH | 62 |
|
11 |
|
25 |
|
35 |
|
| SAFETY | ||||||||
| SAFETY | 14 |
|
75 |
|
66 |
|
74 |
|
| COMBINED | ||||||||
| COMBINED | 22 |
|
44 |
|
49 |
|
59 |
|
Value Metrics in Detail
ANALYSIS: With an Obermatt Value Rank of 49 (worse than 51% compared with alternatives), Wendy's shares are more expensive than the average comparable stock. The Value Rank is based on consolidating four value indicators, with three out of four indicators below average for Wendy's. Only the metric dividend yield has an above-average rank, reflecting that dividend practices are expected to be higher than 92% of comparable companies, making the stock an attractive buy for dividend investors. However, dividend investors may get disappointed because all other critical financial indicators are below the market median: Price-to-Sales is 34 which means that the stock price compared with what market professionals expect for future profits is higher than 66% of comparable companies, indicating a low value concerning Wendy's's sales levels. The same is valid for Price-to-Profit (also referred to as price-earnings, P/E) with a rank of 49 which means that the stock price compared with what market professionals expect for future profit levels is higher than 51% of comparable companies. In addition, Price-to-Book (also referred to as market-to-book ratio) with a Price-to-Book Rank of 8 is also low. Compared with invested capital, the stock price is higher than for 92% of comparable investments. ...read more
RECOMMENDATION: The overall picture with a consolidated Value Rank of 49, is a hold recommendation based on Wendy's's stock price compared with the company's operational size and dividend yields. Should dividend investors pick Wendy's? The company-reported financials speak against it. The company is expensive compared with revenue and invested capital levels, two reliable company size indicators. In addition, it currently has a low level of profits. How can future dividends be paid in the case that profits remain low? Dividend investors should choose Wendy's only if they reasonably expect the low current profit levels to be transitory. We recommend further analyzing the stock with Obermatt’s Value, Safety, and Sentiment Ranks, including the 360° View, before making an investment decision, which is essential in this case, as the financial indicators are inconclusive. ...read more
| VALUE METRICS | 2021 | 2022 | 2023 | 2024 | ||||
|---|---|---|---|---|---|---|---|---|
| PRICE VS. REVENUES (P/S) | ||||||||
| PRICE VS. REVENUES (P/S) | 24 |
|
31 |
|
34 |
|
34 |
|
| PRICE VS. PROFITS (P/E) | ||||||||
| PRICE VS. PROFITS (P/E) | 42 |
|
42 |
|
50 |
|
49 |
|
| PRICE VS. CAPITAL (Market-to-Book) | ||||||||
| PRICE VS. CAPITAL (Market-to-Book) | 4 |
|
8 |
|
14 |
|
8 |
|
| DIVIDEND YIELD | ||||||||
| DIVIDEND YIELD | 60 |
|
96 |
|
96 |
|
92 |
|
| CONSOLIDATED RANK: VALUE | ||||||||
| CONSOLIDATED RANK: VALUE | 28 |
|
45 |
|
59 |
|
49 |
|
Growth Metrics in Detail
ANALYSIS: With an Obermatt Growth Rank of 35 (better than 35% compared with alternatives), Wendy's shows a below-average growth dynamic in its industry. There is limited momentum in this company. The Growth Rank is based on consolidating four value indicators, with all four metrics below average for Wendy's. Sales Growth has a rank of 24, which means that currently professionals expect the company to grow less than 76% of its competitors. The same is valid for Profit Growth, with a rank of 48, and Capital Growth with 38. In addition, Stock Returns have a below market rank of 49, which means that the stock returns have recently been below 51% of alternative investments. ...read more
RECOMMENDATION: The overall picture with a consolidated Growth Rank of 35, is a hold recommendation for growth and momentum investors. These are all bad growth momentum indicators. These are negative signals for investors interested in growth companies. Value is likely good for this company, as investors may have left this stock in the cold. If that is the case, investors should look at the company's outlook, especially Sentiment performance, because it may be a turnaround situation that could entail above-average stock returns in the future. But it remains a risky bet, as no growth signals are in the green zone yet. While momentum is a popular investment factor, the value aspect might be the more important one, in the longer term. We recommend analyzing the stock with Obermatt’s Value, Safety, and Sentiment Ranks to arrive at a 360° View of the stock purchase case, especially since the growth performance is low here. ...read more
| GROWTH METRICS | 2021 | 2022 | 2023 | 2024 | ||||
|---|---|---|---|---|---|---|---|---|
| REVENUE GROWTH | ||||||||
| REVENUE GROWTH | 49 |
|
5 |
|
43 |
|
24 |
|
| PROFIT GROWTH | ||||||||
| PROFIT GROWTH | 69 |
|
28 |
|
45 |
|
48 |
|
| CAPITAL GROWTH | ||||||||
| CAPITAL GROWTH | n/a |
|
30 |
|
51 |
|
38 |
|
| STOCK RETURNS | ||||||||
| STOCK RETURNS | 43 |
|
57 |
|
23 |
|
49 |
|
| CONSOLIDATED RANK: GROWTH | ||||||||
| CONSOLIDATED RANK: GROWTH | 62 |
|
11 |
|
25 |
|
35 |
|
Safety Metrics in Detail
ANALYSIS: With an Obermatt Safety Rank of 74 (better than 74% compared with alternatives), the company Wendy's has financing practices on the safer side, which mean that their overall debt burden is lower than average. This doesn't mean that the business of Wendy's is safe, it only means that the company is on the safer side regarding possible bankruptcy, assuming that public reporting is correct. The Safety Rank is based on consolidating three financing indicators, with just one indicator above average for Wendy's and the other two below average. Refinancing is at 92, meaning the portion of the debt about to be refinanced is below average. It has less debt in the refinancing stage than 92% of its competitors. But Leverage is high with a rank of 35, meaning the company has an above-average debt-to-equity ratio. It has more debt than 65% of its competitors. Liquidity is also on the riskier side with a rank of 49, meaning the company generates less profit to service its debt than 51% of its competitors. ...read more
RECOMMENDATION: With a consolidated Safety Rank of 74 (better than 74% compared with alternatives), Wendy's has a financing structure that is safer than that of its competitors. A good Refinancing Rank means that the problems of the company may not be around the corner. But high Leverage is only good if things go well, and low Liquidity is a signal for caution. The financing signals for Wendy's are on the riskier side, requiring the company's future to be on the safer side. Investors may want to look at Growth and Sentiment ranks before making an investment decision. In the long-term, investors may have a debt challenge with Wendy's and should also compare Obermatt’s Value, Growth, and Sentiment Ranks before making a decision. ...read more
| SAFETY METRICS | 2021 | 2022 | 2023 | 2024 | ||||
|---|---|---|---|---|---|---|---|---|
| LEVERAGE | ||||||||
| LEVERAGE | 24 |
|
32 |
|
34 |
|
35 |
|
| REFINANCING | ||||||||
| REFINANCING | 40 |
|
78 |
|
96 |
|
92 |
|
| LIQUIDITY | ||||||||
| LIQUIDITY | 26 |
|
67 |
|
42 |
|
49 |
|
| CONSOLIDATED RANK: SAFETY | ||||||||
| CONSOLIDATED RANK: SAFETY | 14 |
|
75 |
|
66 |
|
74 |
|
Sentiment Metrics in Detail
| SENTIMENT | 2021 | 2022 | 2023 | 2024 | ||||
|---|---|---|---|---|---|---|---|---|
| ANALYST OPINIONS | ||||||||
| ANALYST OPINIONS | n/a |
|
47 |
|
29 |
|
new |
|
| OPINIONS CHANGE | ||||||||
| OPINIONS CHANGE | n/a |
|
69 |
|
49 |
|
new |
|
| PRO HOLDINGS | ||||||||
| PRO HOLDINGS | n/a |
|
32 |
|
70 |
|
new |
|
| MARKET PULSE | ||||||||
| MARKET PULSE | n/a |
|
62 |
|
95 |
|
new |
|
| CONSOLIDATED RANK: SENTIMENT | ||||||||
| CONSOLIDATED RANK: SENTIMENT | n/a |
|
58 |
|
73 |
|
new |
|
Free stock analysis by the purely fact based Obermatt Method for Wendy's from November 14, 2024.
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