Shareholders of Wingstop Inc. (NASDAQ:WING) will be pleased this week, given that the stock price is up 19% to US$260 following its latest first-quarter results. Revenues were US$171m, approximately in line with whatthe analysts expected, although statutory earnings per share (EPS) crushed expectations, coming in at US$3.24, an impressive 274% ahead of estimates. Following the result, the analysts have updated their earnings model, and it would be good to know whether they think there's been a strong change in the company's prospects, or if it's business as usual. With this in mind, we've gathered the latest statutory forecasts to see what the analysts are expecting for next year.
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Following the latest results, Wingstop's 24 analysts are now forecasting revenues of US$728.0m in 2025. This would be a decent 12% improvement in revenue compared to the last 12 months. Statutory earnings per share are forecast to descend 18% to US$5.07 in the same period. Yet prior to the latest earnings, the analysts had been anticipated revenues of US$732.8m and earnings per share (EPS) of US$3.71 in 2025. There was no real change to the revenue estimates, but the analysts do seem more bullish on earnings, given the considerable lift to earnings per share expectations following these results.
See our latest analysis for Wingstop
There's been no major changes to the consensus price target of US$302, suggesting that the improved earnings per share outlook is not enough to have a long-term positive impact on the stock's valuation. The consensus price target is just an average of individual analyst targets, so - it could be handy to see how wide the range of underlying estimates is. There are some variant perceptions on Wingstop, with the most bullish analyst valuing it at US$385 and the most bearish at US$181 per share. Note the wide gap in analyst price targets? This implies to us that there is a fairly broad range of possible scenarios for the underlying business.
Looking at the bigger picture now, one of the ways we can make sense of these forecasts is to see how they measure up against both past performance and industry growth estimates. It's pretty clear that there is an expectation that Wingstop's revenue growth will slow down substantially, with revenues to the end of 2025 expected to display 16% growth on an annualised basis. This is compared to a historical growth rate of 23% over the past five years. By way of comparison, the other companies in this industry with analyst coverage are forecast to grow their revenue at 9.8% annually. So it's pretty clear that, while Wingstop's revenue growth is expected to slow, it's still expected to grow faster than the industry itself.
The Bottom Line
The most important thing here is that the analysts upgraded their earnings per share estimates, suggesting that there has been a clear increase in optimism towards Wingstop following these results. Happily, there were no major changes to revenue forecasts, with the business still expected to grow faster than the wider industry. There was no real change to the consensus price target, suggesting that the intrinsic value of the business has not undergone any major changes with the latest estimates.
With that said, the long-term trajectory of the company's earnings is a lot more important than next year. We have forecasts for Wingstop going out to 2027, and you can see them free on our platform here.
However, before you get too enthused, we've discovered 2 warning signs for Wingstop that you should be aware of.
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