WING - Wingstop: Sell Today And Walk Away

2024-05-13 15:21:08 ET

Summary

• Higher-end fast food and fast-casual restaurant stocks have performed well in the past year, outperforming the market considerably.
• Wingstop is one such stock. The company has produced impressive results as of late and has a strong competitive proposition with its focused menu and delivery market potential.
• That said, the stock appears to be trading at an extremely high valuation, which could cause materially negative returns to current investors, if the multiple contracts.
• We advocate selling now and coming back to the stock once the valuation risks have softened considerably.
• We rate WING a 'Sell'.

In case you haven't been paying attention, it has been a pretty solid 12 months for higher end fast food and fast-casual restaurant stocks.

Whether it's Chipotle ( CMG ), Sweetgreen ( SG ), Cava ( CAVA ), Shake Shack ( SHAK ) or Wingstop ( WING ), the sector has been on fire, and shares in many of these companies have considerably outperformed the market, rallying upwards of 50% over the last four quarters:

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