The Wendy's Co

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WEN : NASDAQ : Services
$13.59 | %
Today's Range: 0.0 - 0.0
Avg. Daily Volume: 3963500.0
12/07/16 - 4:00 PM ET

Financial Analysis


WENDY'S CO's gross profit margin for the third quarter of its fiscal year 2016 has significantly increased when compared to the same period a year ago. Even though sales decreased, the net income has increased, representing an increase to the bottom line. WENDY'S CO has strong liquidity. Currently, the Quick Ratio is 1.73 which shows the ability to cover short-term cash needs. The company's liquidity has increased from the same period last year.

During the same period, stockholders' equity ("net worth") has remained virtually unchanged only decreasing by 3.81% from the same quarter last year. The key liquidity measurements indicate that the company is unlikely to face financial difficulties in the near future.

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Income Statement Q3 FY16 Q3 FY15
Net Sales ($mil)364.01464.63
EBITDA ($mil)155.92107.81
EBIT ($mil)126.5671.39
Net Income ($mil)48.897.58


Balance Sheet Q3 FY16 Q3 FY15
Cash & Equiv. ($mil)349.56175.7
Total Assets ($mil)4114.424080.78
Total Debt ($mil)2515.822403.13
Equity ($mil)678.58705.46


Profitability Q3 FY16 Q3 FY15
Gross Profit Margin48.7537.26
EBITDA Margin42.8323.2
Operating Margin34.7715.37
Sales Turnover0.390.46
Return on Assets4.532.41
Return on Equity27.9110.52
Debt Q3 FY16 Q3 FY15
Current Ratio2.311.95
Debt/Capital0.790.77
Interest Expense28.7327.94
Interest Coverage4.412.56


Share Data Q3 FY16 Q3 FY15
Shares outstanding (mil)258.89273.33
Div / share0.060.06
EPS0.180.03
Book value / share2.622.58
Institutional Own % n/a n/a
Avg Daily Volume4006089.03900831.0

Valuation


BUY. The current P/E ratio indicates a significant discount compared to an average of 30.85 for the Hotels, Restaurants & Leisure industry and a discount compared to the S&P 500 average of 25.45. To use another comparison, its price-to-book ratio of 4.96 indicates a significant premium versus the S&P 500 average of 2.82 and a significant discount versus the industry average of 7.47. The price-to-sales ratio is above the S&P 500 average, but well below the industry average. Upon assessment of these and other key valuation criteria, WENDY'S CO proves to trade at a discount to investment alternatives within the industry.


Price/Earnings
1 2 3 4 5
premium   discount
  Price/Cash Flow
1 2 3 4 5
premium   discount
WEN 18.83 Peers 30.85   WEN 15.26 Peers 15.58

Discount. A lower P/E ratio than its peers can signify a less expensive stock or lower growth expectations.

WEN is trading at a significant discount to its peers.

 

Average. The P/CF ratio, a stock’s price divided by the company's cash flow from operations, is useful for comparing companies with different capital requirements or financing structures.

WEN is trading at a valuation on par to its peers.

 
Price/Projected
Earnings
1 2 3 4 5
premium   discount
  Price to
Earnings/Growth
1 2 3 4 5
premium   discount
WEN 28.87 Peers 29.37   WEN NM Peers 1.56

Average. An average price-to-projected earnings ratio can signify an industry neutral stock price and average future growth expectations.

WEN is trading at a valuation on par with its peers.

 

Neutral. The PEG ratio is the stock’s P/E divided by the consensus estimate of long-term earnings growth. Faster growth can justify higher price multiples.

WEN's negative PEG ratio makes this valuation measure meaningless.

 
Price/Book
1 2 3 4 5
premium   discount
  Earnings Growth
1 2 3 4 5
lower   higher
WEN 4.96 Peers 7.47   WEN 228.57 Peers 70.73

Discount. A lower price-to-book ratio makes a stock more attractive to investors seeking stocks with lower market values per dollar of equity on the balance sheet.

WEN is trading at a significant discount to its peers.

 

Higher. Elevated earnings growth rates can lead to capital appreciation and justify higher price-to-earnings ratios.

WEN is expected to have an earnings growth rate that significantly exceeds its peers.

 
Price/Sales
1 2 3 4 5
premium   discount
  Sales Growth
1 2 3 4 5
premium   discount
WEN 2.12 Peers 2.94   WEN -16.03 Peers 4.73

Discount. In the absence of P/E and P/B multiples, the price-to-sales ratio can display the value investors are placing on each dollar of sales.

WEN is trading at a significant discount to its industry on this measurement.

 

Lower. A sales growth rate that trails the industry implies that a company is losing market share.

WEN significantly trails its peers on the basis of sales growth

 

 

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