The Wendy's Co

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WEN : NASDAQ : Services
$15.36 | %
Today's Range: 15.125 - 15.51
Avg. Daily Volume: 2756400.0
06/23/17 - 4:00 PM ET

Financial Analysis


WENDY'S CO's gross profit margin for the first quarter of its fiscal year 2017 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 1.60 which shows the ability to cover short-term cash needs. The company's liquidity has decreased from the same period last year, indicating deteriorating cash flow.

At the same time, stockholders' equity ("net worth") has significantly decreased by 28.45% 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 FY17 Q1 FY16
Net Sales ($mil)285.82378.79
EBITDA ($mil)91.9986.07
EBIT ($mil)62.8353.72
Net Income ($mil)22.3425.36


Balance Sheet Q1 FY17 Q1 FY16
Cash & Equiv. ($mil)242.57354.71
Total Assets ($mil)3952.334150.31
Total Debt ($mil)2552.722502.04
Equity ($mil)524.85733.59


Profitability Q1 FY17 Q1 FY16
Gross Profit Margin56.8243.31
EBITDA Margin32.1822.72
Operating Margin21.9814.18
Sales Turnover0.340.43
Return on Assets3.23.83
Return on Equity24.1220.06
Debt Q1 FY17 Q1 FY16
Current Ratio2.12.36
Debt/Capital0.830.77
Interest Expense28.9828.11
Interest Coverage2.171.91


Share Data Q1 FY17 Q1 FY16
Shares outstanding (mil)246.2268.4
Div / share0.070.06
EPS0.090.09
Book value / share2.132.73
Institutional Own % n/a n/a
Avg Daily Volume2639280.02987379.0

Valuation


BUY. The current P/E ratio indicates a discount compared to an average of 38.60 for the Hotels, Restaurants & Leisure industry and a premium compared to the S&P 500 average of 25.73. To use another comparison, its price-to-book ratio of 7.12 indicates a significant premium versus the S&P 500 average of 3.08 and a significant discount versus the industry average of 11.07. The price-to-sales ratio is well 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 31.63 Peers 38.60   WEN 21.18 Peers 19.95

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

WEN is trading at a 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 27.11 Peers 25.86   WEN NM Peers 1.70

Premium. A higher price-to-projected earnings ratio than its peers can signify a more expensive stock or higher future growth expectations.

WEN is trading at a significant premium to 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 7.12 Peers 11.07   WEN -5.89 Peers 113.11

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.

 

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

However, WEN is expected to significantly trail its peers on the basis of its earnings growth rate.

 
Price/Sales
1 2 3 4 5
premium   discount
  Sales Growth
1 2 3 4 5
premium   discount
WEN 2.78 Peers 3.42   WEN -25.31 Peers 4.02

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 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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