Q4 Rundown: Wingstop (NASDAQ:WING) Vs Other Modern Fast Food Stocks

Petr Huřťák /
2024/04/18 3:43 am EDT

Earnings results often indicate what direction a company will take in the months ahead. With Q4 now behind us, let’s have a look at Wingstop (NASDAQ:WING) and its peers.

Modern fast food is a relatively newer category representing a middle ground between traditional fast food and sit-down restaurants. These establishments feature an expanded menu selection priced above traditional fast food options, often incorporating fresher and cleaner ingredients to serve customers prioritizing quality. These eateries are capitalizing on the perception that your drive-through burger and fries joint is detrimental to your health because of inferior ingredients.

The 6 modern fast food stocks we track reported a strong Q4; on average, revenues beat analyst consensus estimates by 1.6%, while next quarter's revenue guidance was 2.8% above consensus. Valuation multiples for many growth stocks have not yet reverted to their early 2021 highs, though the market was optimistic at the end of 2023 due to cooling inflation. The start of 2024 has been a different story as mixed signals have led to market volatility, but modern fast food stocks have shown resilience, with share prices up 6.4% on average since the previous earnings results.

Wingstop (NASDAQ:WING)

The passion project of two chicken wing aficionados in Texas, Wingstop (NASDAQ:WING) is a popular fast-food chain known for its flavorful and crispy chicken wings offered in a variety of sauces and seasonings.

Wingstop reported revenues of $127.1 million, up 21.2% year on year, topping analyst expectations by 5.7%. It was an exceptional quarter for the company, with an impressive beat of analysts' revenue, EBITDA, and EPS estimates, driven by 21% same-store sales growth (estimates of 15%), 24.5% system-wide sales growth (estimates of 17.9%), and 115 net new restaurant openings (estimates of 105).

"2023 marked the strongest year on record for Wingstop where we achieved 18.3% domestic same store sales growth, driven primarily by transactions, and we delivered an unprecedented 20 consecutive years of domestic same store sales growth," said Michael Skipworth, President and Chief Executive Officer.

Wingstop Total Revenue

Wingstop achieved the biggest analyst estimates beat of the whole group. The stock is up 10.4% since the results and currently trades at $358.63.

Read why we think that Wingstop is one of the best modern fast food stocks, our full report is free.

Best Q4: Shake Shack (NYSE:SHAK)

Started as a hot dog cart in New York City's Madison Square Park, Shake Shack (NYSE:SHAK) is a fast-food restaurant known for its burgers and milkshakes.

Shake Shack reported revenues of $286.2 million, up 20% year on year, outperforming analyst expectations by 2.2%. It was a stunning quarter for the company: Shake Shak beat across the board on all key metrics from same-store sales to revenue to profits to EPS. FCF even came in higher than expected and was positive rather than the loss projected by Wall Street analysts.

Shake Shack Total Revenue

The stock is up 21.7% since the results and currently trades at $94.91.

Is now the time to buy Shake Shack? Access our full analysis of the earnings results here, it's free.

Weakest Q4: Noodles (NASDAQ:NDLS)

Offering pasta, mac and cheese, pad thai, and more, Noodles & Company (NASDAQ:NDLS) is a casual restaurant chain that serves all manner of noodles from around the world.

Noodles reported revenues of $124.3 million, down 8.9% year on year, falling short of analyst expectations by 0.8%. It was a weak quarter for the company, with revenue and EPS falling below expectations thanks to worse-than-expected same-store sales performance (4.2% system-wide declines compared to estimates of 3.9%).

Noodles had the weakest performance against analyst estimates, slowest revenue growth, and weakest full-year guidance update in the group. The stock is down 47.5% since the results and currently trades at $1.29.

Read our full analysis of Noodles's results here.

Chipotle (NYSE:CMG)

Born from a desire to offer quick meals with fresh, flavorful ingredients, Chipotle (NYSE:CMG) is a fast-food chain known for its healthy, Mexican-inspired cuisine and customizable dishes.

Chipotle reported revenues of $2.52 billion, up 15.4% year on year, surpassing analyst expectations by 1.1%. It was a very strong quarter for the company, with revenue, same-store sales, and EPS exceeding estimates. The company's outperformance was driven by strong year-on-year unit growth of 7.4%. 

The stock is up 16.3% since the results and currently trades at $2,900.

Read our full, actionable report on Chipotle here, it's free.

Sweetgreen (NYSE:SG)

Founded in 2007 by three Georgetown University alum, Sweetgreen (NYSE:SG) is a casual quick service chain known for its healthy salads and bowls.

Sweetgreen reported revenues of $153 million, up 29.1% year on year, in line with analyst expectations. It was a strong quarter for the company, with an impressive beat of analysts' gross margin estimates. Next quarter's revenue and adjusted EBITDA guidance came in higher than Wall Street's estimates. Finally, while full year revenue guidance was in line, adjusted EBITDA was better than Wall Street estimates.

Sweetgreen achieved the fastest revenue growth and highest full-year guidance raise among its peers. The stock is up 63.1% since the results and currently trades at $20.81.

Read our full, actionable report on Sweetgreen here, it's free.

Join Paid Stock Investor Research

Help us make StockStory more helpful to investors like yourself. Join our paid user research session and receive a $50 Amazon gift card for your opinions. Sign up here.