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RISK CONCERN
Investment Strategy, Risk Analysis, and Insights by Chartered Professionals
The Wendy'S Company (XNAS:WEN) In-Depth Stock/Fundamental/Options Analysis Today
Primary Facts
WEN
Name:
THE WENDY'S COMPANY (XNAS:WEN)
Sector:
8.49M
Industry:
Restaurants
CEO:
Mr. Todd Penegor
Total Employees:
14,500
Our Technological Advancement Rating
Our Rating:
D
Technological advancement compared to industry is -55.22% lower
ANALYSIS OF ALL CRITICAL FACTORS & RISKS RELATED TO THE STOCK & FUNDAMENTAL/LONG-TERM ANALYSIS OF THE WENDY'S COMPANY(WEN) AS PER DATA ANALYSIS OF LAST 3 YEARS AND COMPARISON WITH COMPETITORS/PEERS, AND RESTAURANTS INDUSTRY. DATE: 07/09/2022
Primary Targets/Price Insights
Previous Close ($) :
19.32
One Month Price Target:
$19.42
Six Month Price Target :
$19.92
Likely Price in One Year's Time:
Ticker:
$20.51
Likely Trading Range Today Under (Normal Volatility)
$19.21
Price Upper limit ($) :
$19.44
Price Lower limit ($) :
Crash Risk Prep/Key Price Levels (High Volatility/Risk)
Price, as per data analysis, isn't likely to fall below:
Today:
$17.95
This week:
$16.27
This month :
$13.21
Other Primary facts
Market Cap:
4.05B
Market Cap Classification:
Mid Cap
Number of Shares
IPO Date:
212.80M
Best/Worst Daily Performance (Last 3+ Years)
Highest Daily Appreciation:
42.7%
-28.86%
Worst Daily Decline:
Our Options Trading Entry Points
Iron Condor entry points for options expiring in 1 week's time
Low risk (<2%) entry points
Buy Call:
Sell Call:
Buy Put:
Sell Put:
$25.66
$22.76
$12.98
$15.88
Medium risk (<10%) entry points
Buy Call
Sell Call
$21.81
Buy Put:
Sell Put:
$21.19
$16.82
$17.45
These entry points can be used for other strategies, such as butterflies, straddles, etc.
Risk-Adjusted returns (Sharpe Ratio) of
WEN
Sharpe Ratio:
0.99%
Comparison:
WEN, is amongst the top 60% stocks with highest risk-adjusted returns
Sharpe ratio is -39.81% lower than the industry
& is -56.48% lower than the market/S&P 500 average
Average Returns/Yield of
WEN
Daily returns:
0.04%
Weekly returns:
0.22%
Monthly returns:
0.86%
Yearly returns:
16.01%
Comparison of returns:
Average annual returns/yield (last 3 years) is -35.27% below industry average
Classification:
WEN, is amongst the top 60% highest yielding stocks in terms of daily returns
Results of T-Test of Returns:
0.52
Statistical test of Returns:
WEN has yielded returns statistically similar to the market
Volatility (measured by Standard Deviation)
Daily Volatility:
3.46%
Weekly Volatility:
7.74%
Monthly Volatility:
15.48%
Yearly Volatility:
53.63%
Volitlilty of last five days (Measured by Standard Deviation)
Average Volatility of this Week:
0.96%
Volatility in last five trading days has been -72.31% below long-term volatility
Value at Risk Analysis (VaR)
Daily VaR:
-7.07%
Weekly VaR:
-15.80%
Monthly VaR:
-31.60%
How Much Can the price of
WEN
Decline in a Recession?
Likely price decline in a recession:
Base case (decline):
-27%
Worst case (decline):
>85%
This translates to price declining to:
$14.02
This translates to price declining to:
$2.90
Severe Crash Probability
Risk of crash in next 6/12 months: Medium (<50%)
What is Value at Risk (VaR)?
Risk Fundamentals
WEN is a 123.06% riskier investment compared to the market/S&P 500 & is 91.09% riskier than Nasdaq (IXIC)
Risk (measured by volatility) is -0.87% below industry average
Overall, it is amongst the top 50% most risky stocks
Beta Examination of
WEN
Beta in relation to market/S&P 500--0.92
Expected beta in 1 year's time:
0.772
Expected beta in 3 year's time:
1.092
Unlevered (debt free) Beta:
0.105
Beta in relation to Nasdaq (XNAS):
0.871
Beta in relation to all global stocks::
0.964
Beta Comparison & Analysis
Beta of competitors/peers::
1.283
Beta is -28.38% lower than peers
Average Industry Beta:
1.354
Beta is -32.11% below industry average
Sustainable Growth Rate Analysis
Sustainable growth rate for this stock/firm:
31.23%
Sustainable growth rate is 2.83% above industry average
Alpha provided | Alpha Analysis
Alpha provided:
0.009
Alpha is -74.37% below industry average alpha yield
Alpha is 59% compared to market & is healthy
Analysis of Cost of Capital of
WEN
Equity cost of capital:
0.094
Equity cost of capital is -23.97% below industry mean WACC
Unlevered (without debt) cost of capital:
1.08%
Before-tax cost of debt:
2.47%
After-tax cost of debt:
1.95%
Overall debt rating:
Highest AAA investment grade
Weighted average cost of capital (WACC):
1.95%
WACC is -10.90% below industry mean WACC
Key Per-Share Metrics & Analysis
Revenue per share:
$9.05
Revenue growth rate per share of (3Y):
9.05
Annual revenue growth rate is 179.78% above the industry average
EPS:
$0.88
Expected Annual growth rate of EPS (3Y):
14.05%
Expected future EPS growth rate is 309.37% higher than the Restaurants industry
Free cash flow (FCF) per share:
$0.91
Balance sheet equity growth per share: 3.64%
Equity growth rate per share is -137.64% lower than the industry
Debt per share
$19.88
EBITDA per share
$2.21
Valuation Analysis Today of
WEN
P/E Ratio:
23.72
P/E Ratio of Competitors/Peers:
34.71
P/E ratio is -31.66% lower than main peers & is 0.24% higher than the industry
Stock price/value with industry average P/E ratio: $20.82
WEN is -7.21% undervalued if valued using industry average P/E ratio
Share value as per dividend discount (DDM) model: $39.06
Present value of the expected future dividends only: $10.46
P/S (Price to Sales ratio):
2.14
Price to sales ratio is -34.54% below the industry mean
P/B (Price to book value ratio):
9.05
Price to free cash flow: 21.27
Price to free cash flow ratio is -79.49% lower than the industry
Net income growth rate (3Y):
-33.71%
Net income growth rate is -119.36% lower than the industry average net income growth rate
Dividend Analysis
Dividend payout rate: 13.70%
Dividend yeild: 2.54%
Previous Dividend: $0.13
Previous adjusted dividend: $0.13
Previous Dividend: $0.49
Expected next dividend best case: $0.15
Expected next dividend worst case: $0.10
Average dividend payment (long-term): $0.10
Average dividend increase/decrease (growth rate) % per period: 4.55%
Expected next dividend payment date: 13/09/2022
Expected next dividend record date: 30/08/2022
-
Previous dividend payment date: 15/06/2022
Previous dividend record date: 06/01/2022
-
Dividend History:
2022-05-31--$0.13
2021-11-30--$0.12
2021-05-28--$0.10
2022-03-04--$0.13
2021-08-31--$0.12
2021-03-04--$0.09
Dividend growth rate is -299.88% lower than the industry average
In-depth Debt & Leverage Analysis
Debt to equity ratio:
930.96%
Net debt to equity ratio:
788.49%
Debt to assets ratio:
76.06%
Net debt to assets ratio:
64.42%
Debt-to-asset ratio is -51.74% below industry average
Ability to repay debt:
Interest coverage ratio:
4.41
Interest coverage ratio is -75.05% less than industry average
Looking forward:
Debt growth rate:
-1.02%
Annual debt growth is -103% lower than industry average debt growth rate
Debt repayment rate in last quarter: 0.24%
Analysis of Key Statistics
Correlation of price movement with the market:
0.482
Statistical significance of correlation:
WEN has a statistically significant correlation with the market
Average Correlation of the industry with the market:
0.517
Stock price is -6.79% less correlated with the market compared to the industry average correlation
R Squared (percentage of price movement explained by movement of the market):
0.517
Correlation of price movement with Nasdaq (^IXIC):
-0.016
Covariance of price movement with the market:
-0.032
Kurtosis
52.667
Returns have severe fat-tails (leptokurtic), i.e., returns considerably higher or lower than the mean returns are considerably more likely, compared to assets with normally distributed returns
Skewness of returns:
2.013
Returns are right (positive) skewed; mean returns are greater than median and mode returns
Fundamental Analysis & Dupont Analysis of
WEN
Gross Profit Margin Ratio:
144%
Operating Profit Margin Ratio:
18.63%
Operating profit margin is 98.18% higher than the industry
Net Profit Margin Ratio:
144%
Effective Tax Rate:
17.10%
Effective tax rate is -1.53% lower than the industry
Dupont Method
Net Profit Margin
Return on Equity Ratio (ROE):
×
ROA
=
×
43.22%
Return on equity (ROE) is 13402.14% higher than the industry
Financial Leverage
Asset Turnover Ratio (ROA):
3.53%
Return on assets (ROA) is -75.13% lower than the industry
Financial Leverage:
4.2x
Current Ratio:
2.65
Current ratio is 135.83% above industry average
Cash Conversion Cycle (days):
17.3
Cash conversion cycle is -47.98% below industry average
The remaining useful life of property plant & equipment is: 3.9 years
Stock based compensation to net income ratio:
3.23%
In-depth Efficiency Analysis
Revenue generated per employee:
132.8K
Each employee generates 18% more revenue than industry average revenue per employee
EBITDA generated per employee:
32.5K
Each employee generates 28% more EBITDA than industry average revenue per employee
Profit generated per employee:
13.5K
Each employee generates -5% less net income/profit than industry average revenue per employee
Free cash flow (FCF) generated per employee:
0.6K
Each employee generates -76% less free cash flow than industry average revenue per employee
Assets/Capital per employee
309.2K
Each employee generates -76% less free cash flow than industry average revenue per employee
Research & Development (R&D) Analysis
-
-
Competitors/Peer firms of
WEN
DRIVEN BRANDS HOLDINGS INC. (XNAS:DRVN)
PETCO HEALTH AND WELLNESS COMPANY, INC. (XNAS:WOOF)
WINGSTOP INC. (XNAS:WING)
SILGAN HOLDINGS INC. (XNYS:SLGN)
PAPA JOHN'S INTERNATIONAL, INC. (XNAS:PZZA)
MELCO RESORTS & ENTERTAINMENT LIMITED (XNAS:MLCO)
LIGHT & WONDER, INC. (XNAS:LNW)
COLUMBIA SPORTSWEAR COMPANY (XNAS:COLM)
THE GOODYEAR TIRE & RUBBER COMPANY (XNAS:GT)
Current Analyst Ratings
Strong buy�21%
Buy�25%
Hold�42%
Sell�4%
Strong sell�0%
Overall analyst sentiment is: Hold
Income Statement
Period:
TTM
Date:
4/3/22
Revenue:
1.93B
Cost of Revenue:
Gross Profit:
R&D Expense
General & Admin Expenses:
Selling, General & Admin Expenses
Sales and Marketing Expenses
Other Expenses :
Operating Expenses :
Cost & Expenses :
Interest Income:
Interest Expenses:
Depreciation & Amortization:
EBITDA:
Operating Income:
Other Income Expenses:
Income Before Tax:
Income Tax Expense:
Net Income:
Balance Sheet
Date:
Calendar Year:
Period:
Cash & Cash Equivalents:
Short Term Investments:
Cash & Short Term Investments:
Net Receivables:
Inventory:
Other Current Assets:
Total Current Assets:
PP&E:
Goodwill:
Intangible Assets:
Long Term Investments:
Tax Assets:
Other Non-Current Assets:
Total Non-Current Assets:
Other Assets:
Total Assets:
Accounts Payable:
Short Term Debt:
Tax Payables:
Deferred Revenue:
Other Current Liabilities:
Total Current Liabilities:
Long Term Debt:
Other Non-Current Liabilities:
Total Non Current Liabilities:
Other Liabilities:
Total Liabilities:
Common Stock:
Retained Earnings:
Accumulated Other Comprehensive Loss:
Other Total Stockholders' Equity:
Total Stockholders' Equity:
Total Liabilities and Stockholders' Equity:
Total Investments:
Total Debt:
Net Debt:
1.23B
694.43M
-
252.65M
252.65M
-
111.86M
364.51M
-
106.76M
127.23M
470.94M
358.72M
196.43M
236.95M
40.52M
196.43M
Statement of Cash Flow
Date:
Period:
33.23M
Differed Income Tax :
4.53M
Stock Based Compensation :
6.35M
Change in Working Capital :
- 58537.00K
Accounts Receivables:
-
Other Working Capital:
-
Other Non-Cash Items:
- 1989.00K
Net Cash Provided by Operating Activities:
20.98M
Investments in PP&E:
-
Net Acquisitions:
263.00K
Purchases of Investments:
- 955.00K
Sales/Maturities of Investments:
Other Investing Activities:
Net Cash Used for Investing Activities:
Debt Repayment:
Common Stock Issued:
Common Stock Repurchased:
Dividend Paid:
Other Financing Activities:
Net Cash Used Provided by Financing Activities:
Effect of FOREX on Changes in Cash:
Net Changes in Cash:
Cash at End of Period:
Cash at Beginning of Period:
Operating Cash Flow:
Capital Expenditure:
Free Cash Flow (FCF):
4/3/22
2022
Q1
741.22M
-
741.22M
118.15M
5.95M
214.52M
1.08B
1.93B
775.53M
1.27B
354.24M
-
148.17M
4.48B
-
5.56B
33.15M
93.64M
-
-
280.86M
407.65M
4.23B
197.75M
4.70B
-
5.11B
47.04M
354.68M
- 47082.0K
-
April 3, 2022 at 6:00:00 AM
1.60B
454.54M
5.56B
-
4.33B
3.6B
-
- 12355.00K
- 13047.00K
- 10139.00K
-
-
- 26911.00K
489.85M
452.80M
305.00K
461.04M
828.01M
366.97M
20.98M
- 12496.00K
8.49M
Our Proprietary Portfolio Rating
Our Rating:
D
Price Forecast/Expected Price in Next 5 Years of
WEN
2023
2024
2025
2026
2027
$20.61
$29.17
$30.98
$32.89
$34.92