What Happened?
Shares of fast-food chain Wingstop (NASDAQ:WING) jumped 11.2% in the afternoon session after the company reported impressive first-quarter 2025 results, which blew past analysts' revenue, EPS, and EBITDA expectations. Revenue rose 17.4% year over year, fueled by a 15.7% jump in system-wide sales and the addition of new stores, although domestic same-store sales barely budged with just a 0.5% increase. Zooming out, we think this was a good quarter with some key areas of upside.
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What The Market Is Telling Us
Wingstop’s shares are somewhat volatile and have had 12 moves greater than 5% over the last year. But moves this big are rare even for Wingstop and indicate this news significantly impacted the market’s perception of the business.
The biggest move we wrote about over the last year was 6 months ago when the stock dropped 20.5% on the news that the company reported weak third-quarter earnings: Its EPS missed, and its full-year same-store sales guidance of 20% fell slightly short of Wall Street's projections. On the other hand, revenue and EBITDA exceeded expectations. Still, this was a weaker quarter, and with the stock trading north of 80x P/E, the stock was priced for perfection (the market was likely pricing in a "beat and raise" quarter).
Wingstop is down 11.4% since the beginning of the year, and at $258.80 per share, it is trading 39.7% below its 52-week high of $428.85 from June 2024. Investors who bought $1,000 worth of Wingstop’s shares 5 years ago would now be looking at an investment worth $2,207.
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