Wendy’s Company Intrinsic Value – WENDY’S COMPANY Reports Second Quarter FY2023 Earnings Results on June 30, 2023
August 17, 2023
🌥️Earnings Overview
WENDY’S COMPANY ($NASDAQ:WEN) reported on June 30, 2023 that their earnings for the second quarter of FY2023, ending on that date, had resulted in total revenue of USD 561.6 million, a 4.4% increase compared to the same period in the prior year. Net income for the quarter was USD 59.6 million, a 23.8% growth from the same quarter in the previous year.
Stock Price
The company’s stock opened at $22.1 and closed at $21.3, representing a 2.0% drop from the previous closing price of $21.7. Analysts had predicted that the company would report a decrease in revenues but the company’s financial results showed that it had managed to beat expectations by posting a 1% increase in revenues compared to the same period in the previous year. The company attributed the increase in revenues to its focus on strategic initiatives such as new menu items, digital ordering, and delivery. In summary, WENDY’S COMPANY reported solid second quarter results for FY2023, beating analyst expectations and showing strong growth in both top line and bottom line metrics.
The company’s strategic initiatives are paying off as evidenced by the increase in revenues and same-store sales. WENDY’S COMPANY is well-positioned to continue its financial success in the coming quarters. Live Quote…
About the Company
Income Snapshot
Below shows the total revenue, net income and net margin for Wendy’s Company. More…
| Total Revenues | Net Income | Net Margin |
| 2.16k | 191.27 | 9.8% |
Cash Flow Snapshot
Below shows the cash from operations, investing and financing for Wendy’s Company. More…
| Operations | Investing | Financing |
| 303.21 | -77.93 | -320.31 |
Balance Sheet Snapshot
Below shows the total assets, liabilities and book value per share for Wendy’s Company. More…
| Total Assets | Total Liabilities | Book Value Per Share |
| 5.35k | 4.96k | 1.86 |
Key Ratios Snapshot
Some of the financial key ratios for Wendy’s Company are shown below. More…
| 3Y Rev Growth | 3Y Operating Profit Growth | Operating Margin |
| 8.9% | 16.2% | 18.0% |
| FCF Margin | ROE | ROA |
| 10.1% | 59.8% | 4.5% |
Analysis – Wendy’s Company Intrinsic Value
At GoodWhale, we have analyzed WENDY’S COMPANY‘s fundamentals and determined its fair value to be around $25.0. This value is computed using our proprietary Valuation Line which takes into account the company’s financial metrics such as revenue and earnings growth, profitability ratio, cash flow, etc. Currently, WENDY’S COMPANY is trading at $21.3 per share, which is undervalued by 14.9%. This presents a great opportunity for investors to buy the stock at a low price and benefit from potential price appreciation in the future. More…
Peers
In the quick-service restaurant industry, the Wendy’s Co. competes with McDonald’s Corp, Chipotle Mexican Grill Inc, and Yum Brands Inc. All of these companies are trying to attract customers with fresh, high-quality food at a reasonable price. Wendy’s Co. has an advantage over its competitors because it is a smaller company and can be more nimble in its response to customer trends.
– McDonald’s Corp ($NYSE:MCD)
McDonald’s Corp has a market cap of 187.28B as of 2022, a Return on Equity of -90.17%. McDonald’s Corporation is an American fast food company, founded in 1940 as a restaurant operated by Richard and Maurice McDonald, in San Bernardino, California, United States. They rechristened their business as a hamburger stand. The first McDonald’s franchise using the arches logo opened in Phoenix, Arizona in 1953. Businessman Ray Kroc joined the company as a franchise agent in 1955. He subsequently purchased the chain from the McDonald brothers and oversaw its worldwide growth.
– Chipotle Mexican Grill Inc ($NYSE:CMG)
Founded in 1993, Chipotle Mexican Grill is a chain of restaurants that primarily serves Mexican-style cuisine, including tacos and burritos. As of December 31, 2020, there were 2,724 Chipotle restaurants in the United States, Canada, the United Kingdom, France, and Germany. The company has a market cap of $43.03B as of 2022 and a return on equity of 27.52%.
– Yum Brands Inc ($NYSE:YUM)
Yum Brands Inc is a publicly traded American fast food company with more than 40,000 locations in over 140 countries. The company operates the brands KFC, Pizza Hut, and Taco Bell. Yum Brands is headquartered in Louisville, Kentucky.
Yum Brands Inc has a market cap of 31.59B as of 2022. The company has a Return on Equity of -15.87%. Yum Brands Inc is a publicly traded American fast food company with more than 40,000 locations in over 140 countries. The company operates the brands KFC, Pizza Hut, and Taco Bell. Yum Brands is headquartered in Louisville, Kentucky.
Summary
Wendy’s Co. reported strong financial growth for the second quarter of FY2023, with total revenues increasing 4.4% to $561.6 million and net income increasing 23.8% to $59.6 million. Investors will be pleased with the growth in both revenues and earnings, which exceeded expectations. Wendy’s stock price has already responded positively to the news, and analysts believe the outlook for the company is positive given its strong financial performance. Going forward, investors should continue to keep a close eye on Wendy’s as the company seeks to maintain and strengthen its market position.
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