The Wendy's Co. (WEN) Stock Recommendation | Score, Valuation, Technicals & Financial Trend

Score

Click here to find our call on this stock

Strong Sell

Sell

Hold

Buy

Strong Buy

Comparison

Company

Score

Quality

Valuation

Financial

Technical

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Wingstop, Inc.

The Wendy's Co.

Why is The Wendy's Co. ?

The company has declared negative results for the last 2 consecutive quarters

OPERATING CASH FLOW(Y) Lowest at USD 318.52 MM
INTEREST COVERAGE RATIO(Q) Lowest at 259.68
RAW MATERIAL COST(Y) Grown by 11.77% (YoY)

Consistent Underperformance against the benchmark over the last 3 years

Along with generating -49.19% returns in the last 1 year, the stock has also underperformed S&P 500 in each of the last 3 annual periods

Real-Time Research Report

Verdict Report

How much should you sell?

All quantity irrespective of whether you are making profits or losses

(If sector exposure > 30%, please use optimiser tool to see which are the best stocks to hold in Leisure Services)

When to re-enter? - We will constantly monitor the company and review our call based on new data

Is The Wendy's Co. for you?

High Risk, Low Return

Absolute

Risk Adjusted

Volatility

The Wendy's Co.

-49.19%

-1.32

46.82%

S&P 500

22.24%

1.67

13.28%

Quality

Management Risk

Growth

Capital Structure

Quality grade scale :

Below Average, Average, Good, Excellent

Quality key factors

Factor

Value

Sales Growth (5y)

4.66%

EBIT Growth (5y)

3.35%

EBIT to Interest (avg)

2.87

Debt to EBITDA (avg)

4.07

Net Debt to Equity (avg)

17.82

Sales to Capital Employed (avg)

0.73

Tax Ratio

29.01%

Dividend Payout Ratio

78.75%

Pledged Shares

Institutional Holding

100.00%

ROCE (avg)

14.03%

ROE (avg)

70.51%

Valuation

Valuation Scorecard

Valuation grade scale :

Very Risky, Risky, Very Expensive, Expensive, Fair, Attractive, Very Attractive

Valuation Key Factors

Factor

Value

P/E Ratio

Industry P/E

Price to Book Value

25.46

EV to EBIT

16.46

EV to EBITDA

10.87

EV to Capital Employed

2.11

EV to Sales

2.51

PEG Ratio

Dividend Yield

3.92%

ROCE (Latest)

12.79%

ROE (Latest)

149.87%

Technicals

Technical key factors

Indicator

Weekly

Monthly

MACD

Bearish

RSI

No Signal

Bullish

Bollinger Bands

Mildly Bearish

Bearish

Moving Averages

Bearish (Daily)

KST

Bearish

Dow Theory

Mildly Bearish

OBV

Mildly Bearish

Technical Indicator Scale: Bearish, Mildly Bearish, Sideways, Mildly Bullish, Bullish Turned

Technical Movement

Analyse All Technical Factors

Financial Trend

Financial Trend Scorecard

Financial Trend scale:

Very Negative, Negative, Flat, Positive, Very Positive, Outstanding

3What is working for the Company

ROCE(HY)

Highest at 120.88%

DEBTORS TURNOVER RATIO(HY)

Highest at 19.29 times

-24What is not working for the Company

OPERATING CASH FLOW(Y)

Lowest at USD 318.52 MM

INTEREST COVERAGE RATIO(Q)

Lowest at 259.68

RAW MATERIAL COST(Y)

Grown by 11.77% (YoY

CASH AND EQV(HY)

Lowest at USD 804.86 MM

INTEREST(Q)

Highest at USD 40.81 MM

OPERATING PROFIT(Q)

Lowest at USD 105.96 MM

OPERATING PROFIT MARGIN(Q)

Lowest at 19.6 %

PRE-TAX PROFIT(Q)

Lowest at USD 34.67 MM

NET PROFIT(Q)

Lowest at USD 23.05 MM

EPS(Q)

Lowest at USD 0.12

Here's what is working for The Wendy's Co.

Debtors Turnover Ratio

Highest at 19.29 times

in the last five Semi-Annual periods

MOJO Watch

Company has been able to sell its Debtors faster

Debtors Turnover Ratio

Here's what is not working for The Wendy's Co.

Operating Cash Flow

Lowest at USD 318.52 MM and Fallen

In each year in the last three years

MOJO Watch

The company's cash revenues from business operations are falling

Operating Cash Flows (USD MM)

Interest

At USD 40.81 MM has Grown at 25.55%

period on period (QoQ)

MOJO Watch

Rising interest cost signifies increased borrowings

Interest Paid (USD MM)

Interest Coverage Ratio

Lowest at 259.68

in the last five periods

MOJO Watch

The company's ability to manage interest payments is deteriorating

Operating Profit to Interest

Pre-Tax Profit

At USD 34.67 MM has Fallen at -39.55%

Year on Year (YoY)

MOJO Watch

Near term Pre-Tax Profit trend is very negative

Pre-Tax Profit (USD MM)

Net Profit

At USD 23.05 MM has Fallen at -43.75%

Year on Year (YoY)

MOJO Watch

Near term Net Profit trend is very negative

Net Profit (USD MM)

Interest

Highest at USD 40.81 MM

in the last five periods and Increased by 25.55% (QoQ)

MOJO Watch

Rising interest cost signifies increased borrowings

Interest Paid (USD MM)

Operating Profit

Lowest at USD 105.96 MM

in the last five periods

MOJO Watch

Near term Operating Profit trend is negative

Operating Profit (USD MM)

Operating Profit Margin

Lowest at 19.6 %

in the last five periods

MOJO Watch

Company's profit margin has deteriorated

Operating Profit to Sales

Pre-Tax Profit

Lowest at USD 34.67 MM

in the last five periods

MOJO Watch

Near term Pre-Tax Profit trend is negative

Pre-Tax Profit (USD MM)

Net Profit

Lowest at USD 23.05 MM

in the last five periods

MOJO Watch

Near term Net Profit trend is negative

Net Profit (USD MM)

EPS

Lowest at USD 0.12

in the last five periods

MOJO Watch

Declining profitability; company has created lower earnings for shareholders

EPS (USD)

Cash and Eqv

Lowest at USD 804.86 MM

in the last six Semi-Annual periods

MOJO Watch

Short Term liquidity is deteriorating

Cash and Cash Equivalents

Raw Material Cost

Grown by 11.77% (YoY)

MOJO Watch

The company's ability to pass on the cost of raw materials to customers has deteriorated; this may lead to a fall in profit margin

Raw Material Cost as a percentage of Sales

Non Operating Income

Highest at USD 0.43 MM

in the last five periods

MOJO Watch

Increased income from non business activities may not be sustainable

Non Operating income