Wendys Story

WEN -  USA Stock  

USD 23.10  0.40  1.70%

As many millenniums are trying to avoid consumer cyclical space, it makes sense to outline Wendys Company a little further and try to understand its current market patterns. We will try to explain if it is still possible for Wendys to generate above-average margins. Is current the entity value sustainable? We will go over the stock valuation drivers to give you a better outlook on taking a position in it.
Published over a month ago
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Is Wendys (NASDAQ:WEN) valuation reasonable?
The company has 3.68 B in debt with debt to equity (D/E) ratio of 6.69, demonstrating that Wendys Company may be unable to create cash to meet all of its financial commitments. Wendys Company has a current ratio of 1.63, which is typical for the industry and considered as normal.
Our trade advice module complements current analysts and expert consensus on Wendys Company. It analyzes the entity potential to grow using all fundamental, technical, and market related data available at the time.
We determine the current worth of Wendys Company using both absolute as well as relative valuation methodologies to arrive at its intrinsic value. In general, an absolute valuation paradigm, as applied to this company, attempts to find the value of Wendys Company based exclusively on its fundamental and basic technical indicators. By analyzing Wendys's financials, quarterly and monthly indicators, and related drivers such as dividends, operating cash flow, and various types of growth rates, we attempt to find the most accurate representation of Wendys's intrinsic value. In some cases, mostly for established, large-cap companies, we also incorporate more traditional valuation methods such as dividend discount, discounted cash flow, or asset-based models. As compared to an absolute model, our relative valuation model uses a comparative analysis of Wendys. We calculate exposure to Wendys's market risk, different technical and fundamental indicators, relevant financial multiples and ratios, and then comparing them to Wendys's related companies.

Wendys Company Investment Alerts

Wendys investment alerts and warnings help investors to get more proficient at understanding not only critical technical and fundamental signals but also the significant portfolio-centered indicators. These indicators include beta, alpha, and other risk-related measures that will help you in monitoring Wendys Company performance across your portfolios.Please check all investment alerts for Wendys

Wendys Valuation Ratios as Compared to Competition

Our valuation model uses many indicators to compare Wendys value to that of its competitors to determine the firm's financial worth. You can analyze the relationship between different fundamental ratios across Wendys competition to find correlations between indicators driving the intrinsic value of Wendys.

What do experts say?

Stock analysis is a method for investors and traders to make buying and selling decisions. By studying and evaluating past and current data, investors and traders attempt to gain an edge in the markets by making informed decisions.
It is good to see analyst projects for Wendys, but it might be worth checking our own buy vs. sell analysis

Acquisition by Vasconi John Kevin of 177 shares of Wendys subject to Rule 16b-3

Legal trades by Wendys insiders are very common, as founders, directors, or employees of any publicly traded firm often have stock or stock options. These trades are made public in the United States through the filing of Form 4 of the Securities and Exchange Commission. Below entry was recorded recently and is publicly available as an insider trade:
WEN insider trading alert for grant of restricted stock units by Vasconi John Kevin, Chief Information Officer, on 17th of June 2021. This event was filed by Wendys Co with SEC on 2021-06-17. Statement of changes in beneficial ownership - SEC Form 4 [view details]   
Note, although insider trading is legal, in the United States, Canada, Australia, and Germany, for mandatory reporting purposes, corporate insiders are defined as a company's officers, directors, and any beneficial owners of more than 10% of a class of the company's equity securities.

What is driving Wendys Investor Appetite?

The entity reported the last year's revenue of 1.4 B. Total Income to common stockholders was 117.83 M with profit before taxes, overhead, and interest of 633.18 M.
 2012 2017 2018 2021 (projected)
Receivables98.83 M114.39 M109.89 M118.04 M
Inventories2.85 M3.16 M4.73 M4.15 M

Margins Breakdown

Wendys profit margins show the degree to which it makes money. Margin indicators are used not only by investors but also by creditors or Wendys itself as indicators of financial health and management effectiveness. Please look more closely at the different varieties of Wendys profit margins.
11.92
Profit Margin
19.0
Operating Margin
23.91
EBITDA Margin
Operating Margin19.0
EBITDA Margin23.91
Gross Margin56.93
Profit Margin11.92


Wendys Net Income Per Employee is quite stable at the moment. Wendys Earnings Before Interest Taxes and Depreciation Amortization USD is quite stable at the moment. Furthermore, Wendys Earnings Before Interest Taxes and Depreciation Amortization EBITDA is quite stable at the moment. Wendys Net Income Per Employee is increasing over the last 5 years. Wendys Earnings Before Interest Taxes and Depreciation Amortization USD is decreasing over the last 6 years. Furthermore, Wendys Earnings Before Interest Taxes and Depreciation Amortization EBITDA is increasing over the last 5 years. The latest value of Wendys Earnings Before Interest Taxes and Depreciation Amortization EBITDA is 346,440,526.

Another setback for Wendys institutional investors

The total risk alpha is down to -0.3 as of today. Wendys Company has relatively low volatility with skewness of 0.0 and kurtosis of 1.83. However, we advise all investors to independently investigate Wendys Company to ensure all accessible information is consistent with the expectations about its upside potential and future expected returns. Understanding different market volatility trends often help investors to time the market. Properly using volatility indicators enable traders to measure Wendys' stock risk against market volatility during both bullying and bearish trends. The higher level of volatility that comes with bear markets can directly impact Wendys' stock price while adding stress to investors as they watch their shares' value plummet. This usually forces investors to rebalance their portfolios by buying different stocks as prices fall.

Our Bottom Line On Wendys Company

Whereas some firms within the restaurants industry are still a little expensive, even after the recent corrections, Wendys may offer a potential longer-term growth to institutional investors. To summarize, as of the 12th of May 2021, we believe that at this point, Wendys is undervalued with close to average probability of distress within the next 2 years. Our ongoing buy vs. sell advice on the company is Strong Hold.

About Contributor

This story should be regarded as informational only and should not be considered a solicitation to sell or buy any financial products. Macroaxis does not express any opinion as to the present or future value of any investments referred to in this post. This post may not be reproduced without the consent of Macroaxis LLC. Macroaxis LLC and Achuva Shats do not own shares of Wendys Company. Please refer to our Terms of Use for any information regarding our disclosure principles.

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