The Wendy's Company
The Wendy's Company Fundamental Analysis
The Wendy's Company (WEN) shows weak financial fundamentals with a PE ratio of 9.25, profit margin of 7.58%, and ROE of 1.41%. The company generates $2.2B in annual revenue with weak year-over-year growth of 2.98%.
Key Strengths
Areas of Concern
The stock receives a Fundamental Health Score of 39.4/100 based on profitability, valuation, growth, and balance sheet metrics. The F grade reflects weak fundamentals and significant financial concerns.
Fundamental Health Score
We analyze WEN's fundamental strength across five key dimensions:
Efficiency Score
WeakWEN struggles to generate sufficient returns from assets.
Valuation Score
ExcellentWEN trades at attractive valuation levels.
Growth Score
WeakWEN faces weak or negative growth trends.
Financial Health Score
ModerateWEN shows balanced financial health with some risks.
Profitability Score
ModerateWEN maintains healthy but balanced margins.
Key Financial Metrics
Is WEN Expensive or Cheap?
P/E Ratio
WEN trades at 9.25 times earnings. This suggests potential undervaluation.
PEG Ratio
When adjusting for growth, WEN's PEG of -0.98 indicates potential undervaluation.
Price to Book
The market values The Wendy's Company at 13.00 times its book value. This suggests the stock is fully valued or overvalued on an asset basis.
EV/EBITDA
Enterprise value stands at -4.75 times EBITDA. This is generally considered low.
How Well Does WEN Make Money?
Net Profit Margin
For every $100 in sales, The Wendy's Company keeps $7.58 as profit after all expenses.
Operating Margin
Core operations generate 15.59 in profit for every $100 in revenue, before interest and taxes.
ROE
Management delivers $1.41 in profit for every $100 of shareholder equity.
ROA
The Wendy's Company generates $3.33 in profit for every $100 in assets, demonstrating efficient asset deployment.
Following the Money - Real Cash Generation
Operating Cash Flow
The Wendy's Company produces operating cash flow of $344.73M, showing steady but balanced cash generation.
Free Cash Flow
The Wendy's Company generates strong free cash flow of $242.75M, providing ample flexibility for dividends, buybacks, or growth.
FCF Per Share
Each share generates $1.28 in free cash annually.
FCF Yield
WEN converts 15.62% of its market value into free cash.
Financial Ratios Analysis
Valuation Ratios
P/E Ratio
Price to earnings ratio
9.25
vs 25 benchmark
PEG Ratio
Price/earnings to growth ratio
-0.98
vs 25 benchmark
P/B Ratio
Price to book value ratio
13.003
vs 25 benchmark
P/S Ratio
Price to sales ratio
0.70
vs 25 benchmark
Financial Health
Debt/Equity
Total debt to shareholders' equity
35.31
vs 25 benchmark
Current Ratio
Current assets to current liabilities
1.76
vs 25 benchmark
Efficiency Ratios
ROE
Return on equity percentage
1.41
vs 25 benchmark
ROA
Return on assets percentage
0.03
vs 25 benchmark
ROCE
Return on capital employed
0.07
vs 25 benchmark
How WEN Stacks Against Its Sector Peers
| Metric | WEN Value | Sector Average | Performance |
|---|---|---|---|
| P/E Ratio | 9.25 | 25.25 | Better (Cheaper) |
| ROE | 140.58% | 1170.00% | Weak |
| Net Margin | 7.58% | 742.00% | Weak |
| Debt/Equity | 35.31 | 0.77 | Weak (High Leverage) |
| Current Ratio | 1.76 | 9.19 | Neutral |
| ROA | 3.33% | -6467.00% (disorted) | Weak |
WEN outperforms its industry in 1 out of 6 key metrics, but lagging in ROE.
Historical Growth Performance
5-Year Growth Trajectory
This section reviews The Wendy's Company's 5-year compound annual growth rate (CAGR) and compares its performance against the typical investment style of its industry.
Revenue CAGR
47.91%
Industry Style: Cyclical, Growth, Discretionary
High GrowthEPS CAGR
59.70%
Industry Style: Cyclical, Growth, Discretionary
High GrowthFCF CAGR
38.37%
Industry Style: Cyclical, Growth, Discretionary
High Growth