The Wendy's Co

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WEN : NASDAQ : Services
$9.70 -0.04 | -0.41%
Today's Range: 9.67 - 9.86
Avg. Daily Volume: 3,760,500
07/27/16 - 2:28 PM ET

Financial Analysis


WENDY'S CO's gross profit margin for the first quarter of its fiscal year 2016 has significantly increased when compared to the same period a year ago. Sales and net income have dropped, underperforming the average competitor within its industry. WENDY'S CO has strong liquidity. Currently, the Quick Ratio is 1.72 which shows the ability to cover short-term cash needs. The company's liquidity has increased from the same period last year, indicating improving cash flow.

At the same time, stockholders' equity ("net worth") has significantly decreased by 57.24% 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 Q1 FY16 Q1 FY15
Net Sales ($mil)378.79451.77
EBITDA ($mil)100.7384.22
EBIT ($mil)68.3848.67
Net Income ($mil)25.3627.51


Balance Sheet Q1 FY16 Q1 FY15
Cash & Equiv. ($mil)354.71202.86
Total Assets ($mil)4150.314133.84
Total Debt ($mil)2502.041449.88
Equity ($mil)733.591715.86


Profitability Q1 FY16 Q1 FY15
Gross Profit Margin43.3132.46
EBITDA Margin26.5918.64
Operating Margin18.0510.77
Sales Turnover0.430.47
Return on Assets3.832.48
Return on Equity20.065.21
Debt Q1 FY16 Q1 FY15
Current Ratio2.361.62
Debt/Capital0.770.46
Interest Expense28.1112.74
Interest Coverage2.433.82


Share Data Q1 FY16 Q1 FY15
Shares outstanding (mil)268.4365.3
Div / share0.060.06
EPS0.090.05
Book value / share2.734.7
Institutional Own % n/a n/a
Avg Daily Volume3625547.04289254.0

Valuation


BUY. This stock's P/E ratio indicates a discount compared to an average of 28.27 for the Hotels, Restaurants & Leisure industry and a discount compared to the S&P 500 average of 25.05. Conducting a second comparison, its price-to-book ratio of 3.60 indicates a premium versus the S&P 500 average of 2.81 and a significant discount versus the industry average of 11.48. The price-to-sales ratio is below the S&P 500 average and is well below the industry average, indicating a discount. 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 19.31 Peers 28.27   WEN 10.98 Peers 13.95

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.

 

Discount. 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 discount 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 22.91 Peers 24.99   WEN NM Peers 2.68

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 3.60 Peers 11.48   WEN 112.50 Peers 18.32

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 1.47 Peers 2.92   WEN -7.45 Peers 8.46

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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