Wendy's Co

Consumer Discretionary
Restaurants
www.wendys.com

Earnings Score
Moat Score
Safety Score

Market Cap $3.55B
PE 18
Debt $2.75B
Cash $554.53M
EV $5.74B
FCF $280.88M

Earnings

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Sales & Net Margins

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Earnings	$193.80M
EBIT	$361.97M
ROE	75%
ROA	7%
FCF	$280.88M
Equity	$259.85M
Growth Stability	45%
PE	18.32
PEG	1.4
PB	13.66
P/FCF	12.64
P/S	1.6
Price/Cash	0.16
Debt/Equity	10.57
Debt/FCF	9.78
Net Margins	9%
Gross Margins	65%
Op. Margins	16%
Earnings CAGR	2%
Sales Growth YoY	3%
Sales Growth QoQ	-1%
Sales CAGR	6%
FCF CAGR	23%
Equity CAGR	-11%
Earnings Stability	0.01
Earnings Growth YoY	-13%
Earnings Growth QoQ	-8%
Earnings CAGR 5Y	13%

Sales CAGR 5Y	7%
FCF CAGR 5Y	10%
Equity CAGR 5Y	-13%
Earnings CAGR 3Y	6%
Sales CAGR 3Y	6%
FCF CAGR 3Y	14%
Equity CAGR 3Y	-20%
Market Cap	$3.55B
Revenue	$2.21B
Dividend Yield	6%
Payout Ratio	106%
Assets	$5.07B
Total Debt	$2.75B
Cash	$554.53M
Shares Outstanding	203.09M
EV	5.74B
Earnings Score	6%
Moat Score	90%
Safety Score	34%
Final Score	43%
Working Capital	410.14M
Current Ratio	2.1
Gross Profit	$1.43B
Shares Growth 3y	-2%
Equity Growth QoQ	-5%
Equity Growth YoY	-24%

Assets & ROA

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Stockholders Equity & ROE

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The Wendy's Company is the second-largest burger quick-service restaurant, or QSR, chain in the United States by systemwide sales, with $11.1 billion in 2021, narrowly edging Burger King ($10.3 billion) and clocking in well behind wide-moat McDonald's ($45.7 billion). After divestitures of Tim Horton's (2006) and Arby's (2011), the firm manages just the burger banner, generating sales across a footprint that spans almost 7,000 total units in 30 countries. Wendy's generates revenue from the sale of hamburgers, chicken sandwiches, salads, and fries throughout its company-owned footprint, through franchise royalty and marketing fund payments remitted by its franchisees, which account for 94% of stores, and through franchise flipping and advisory fees.

SEC Filings

Direct access to Wendy's Co (WEN) Annual Reports (10K) and Quarterly Reports (10Q) from the SEC website.

2024
- 10-Q Sep 29
- 10-Q Jun 30
- 10-Q Mar 31
2023
- 10-K Dec 31
- 10-Q Oct 01
- 10-Q Jul 02
- 10-Q Apr 02
- 10-K Jan 01
2022
- 10-Q Oct 02
- 10-Q Jul 03
- 10-Q Apr 03
- 10-K Jan 02

Sector Comparison

How does Wendy's Co compare to its competitors?

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Peter Lynch's Chart

This chart shows the current pricing of Wendy's Co compared to its past. The addition of the earnings trend line provides further insights into the company's earnings power.

CAGR 2%

Stability 1%

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Wendy's Co Discounted Cash Flow

Fully customizable DCF calculator online for Wendy's Co.

Years

Calculation mode

= $14B

	0	1	2	3	4	5	6	7	8	9	10	TV
fcf	$281M	$344M	$422M	$518M	$635M	$779M	$955M	$1.2B	$1.4B	$1.8B	$2.2B	$22B
DCF		$313M	$349M	$389M	$434M	$484M	$539M	$601M	$670M	$747M	$833M	$8.3B
Value	$14B

Competitiveness and MOAT

High margins render the company resilient under dire circumstances, hence able to drive competitors out or acquire them. ROE and ROA measure the average flow generated by each invested dollar. Their marginal value is a forecast of future growth, and it is considered by Buffett and Munger the most important single indicator.

Years	12/2014	01/2016	12/2016	12/2017	12/2018	12/2019	01/2021	01/2022	12/2022	12/2023	TTM
Net Margins	6%	9%	9%	16%	29%	8%	7%	11%	8%	9%	9%
ROA	-	7%	8%	5%	13%	5%	5%	7%	6%	7%	7%
ROE	-	21%	25%	34%	71%	27%	21%	46%	38%	66%	75%

Net Margins (8.78%)

Net Margins are at a level that is not too high nor too low. They are not a competitive advantage but they are not a competitive disadvantage either.

Safety and Stability

Being debt the number one cause of investment losses and company death, the ratio Debt/FCF is of utmost importance to guarantee safety. On the other hand the Graham’s stability measures the drawdown of earnings, hence indicating the reliability of the flow generated by the company.

Years	12/2014	01/2016	12/2016	12/2017	12/2018	12/2019	01/2021	01/2022	12/2022	12/2023	TTM
Debt over FCF	-	-63.92	82.3	16.61	18.51	10.93	10.73	9.14	16.78	10.85	9.78
Debt over Equity	0.88	3.32	4.89	4.92	4.41	4.54	4.21	5.61	6.28	9.12	10.57
Growth Stability	-	-	-	100%	100%	52%	45%	84%	100%	100%	45%

Bad Debt/FCF ratio (9.78)

Net Margins are too low to guarantee profitability in case of higher costs or higher interest rates. Furthermore lower margins cause higher earnings’ volatility.

Bad Debt/Equity ratio (10.57)

The company is overleveraged and has a bad balance between equity and debt.

Bad Graham’s Stability (45%)

The company has a bad stability in its earnings, which is a sign of a bad competitive advantage.

Growth

Growth can be dangerous when forecasting, simply projecting the current growth is in general wrong. A company passes through multiple phases, from being young and unprofitable, to the first periods of profitability and high growth, until it arrives at a period of regime with limited growth. Identifying in which phase the company is in may help forecasting.

Years	12/2014	01/2016	12/2016	12/2017	12/2018	12/2019	01/2021	01/2022	12/2022	12/2023	CAGR 5Y
Revenue YoY growth	-	-9%	-23%	-15%	30%	7%	1%	9%	10%	4%	7%
Earnings YoY growth	-	33%	-20%	50%	137%	-70%	-14%	70%	-11%	15%	13%
Equity YoY growth	-	-56%	-30%	9%	13%	-20%	6%	-21%	7%	-33%	-13%
FCF YoY growth	-	-10%	-180%	441%	-9%	39%	0%	24%	-35%	49%	10%