As of June 18, 2025, Wingstop Inc's estimated intrinsic value ranges from $9.69 to $257.06 per share, depending on the valuation methodology applied.
| Valuation Method | Fair Value (USD) | Implied Upside/Downside |
|---|---|---|
| Discounted Cash Flow (10Y) | $257.06 | -25.7% |
| Discounted Cash Flow (5Y) | $198.81 | -42.6% |
| Dividend Discount Model (Multi-Stage) | $149.46 | -56.8% |
| Dividend Discount Model (Stable) | $242.50 | -29.9% |
| Earnings Power Value | $9.69 | -97.2% |
Is Wingstop Inc (WING) undervalued or overvalued?
With the current market price at $346.14, the stock appears to be significantly overvalued.
Intrinsic value represents the "true" worth of a company based on its fundamentals rather than market sentiment. We've employed multiple methodologies to triangulate Wingstop Inc's intrinsic value, including:
The cost of capital is a critical factor in valuation models, representing the required return for investors.
| WACC Component | Low | High |
|---|---|---|
| Long-term bond rate | 3.9% | 4.4% |
| Equity market risk premium | 4.6% | 5.6% |
| Adjusted beta | 0.54 | 0.71 |
| Cost of equity | 6.4% | 8.8% |
| Cost of debt | 4.0% | 4.6% |
| Tax rate | 24.8% | 25.8% |
| Debt/Equity ratio | 0.12 | 0.12 |
| After-tax WACC | 6.0% | 8.2% |
Our DCF model projects cash flows over 5-year and 10-year horizons, with the following key assumptions:
| DCF Model | Fair Value | Enterprise Value | % from Terminal Value |
|---|---|---|---|
| 5-Year Growth | $199 | $6,502M | 87.4% |
| 10-Year Growth | $257 | $8,127M | 77.1% |
| 5-Year EBITDA | $72 | $2,954M | 72.2% |
| 10-Year EBITDA | $115 | $4,175M | 55.4% |
The DDM values a company based on its expected future dividend payments. We used two approaches:
EPV assesses a company's value based on its current normalized earnings power, assuming no growth.
| EPV Component | Value |
|---|---|
| Normalized Earnings | $85M |
| Discount Rate (WACC) | 8.2% - 6.0% |
| Enterprise Value | $1,032M - $1,420M |
| Net Debt | $956M |
| Equity Value | $76M - $465M |
| Outstanding Shares | 28M |
| Fair Value | $3 - $17 |
| Selected Fair Value | $9.69 |
| Metric | Value |
|---|---|
| Market Capitalization | $9657M |
| Enterprise Value | $10613M |
| Trailing P/E | 56.07 |
| Forward P/E | 73.02 |
| Trailing EV/EBITDA | 7.60 |
| Current Dividend Yield | 30.68% |
| Dividend Growth Rate (5Y) | -35.21% |
| Debt-to-Equity Ratio | 0.12 |
To determine the most reliable intrinsic value estimate, we weigh each valuation method based on:
| Valuation Method | Weight | Weighted Value |
|---|---|---|
| Discounted Cash Flow (10Y) | 30% | $77.12 |
| Discounted Cash Flow (5Y) | 25% | $49.70 |
| Dividend Discount Model (Multi-Stage) | 20% | $29.89 |
| Dividend Discount Model (Stable) | 15% | $36.37 |
| Earnings Power Value | 10% | $0.97 |
| Weighted Average | 100% | $194.06 |
Based on our comprehensive valuation analysis, Wingstop Inc's weighted average intrinsic value is $194.06, which is approximately 43.9% below the current market price of $346.14.
Key investment considerations:
Given these factors, we believe Wingstop Inc is currently significantly overvalued with the potential for long-term appreciation based on the company's growth trajectory and financial strength.