Daniel Boczarski
Wingstop (NASDAQ:WING) was named a top SMID cap stock pick at TD Cowen following the restaurant operator’s consensus-topping Q2 earnings report.
The firm likes Wingstop (WING) as a 98% franchised business model with operational simplicity and robust “omni-channel” digital penetration for pick-up and third-party delivery, or key differentiators in comparison to other smidcap restaurants.
Looking ahead, analyst Andrew Charles and team noted that they are most excited about Wingstop’s (WING) ability to reach a target of $2M AUV in 2026 through growing the mix of digital/delivery and boneless chicken along with improving value perceptions.
“We model 2024-26E SSS of 5%. Within Wingstop’s 65% digital mix of sales, delivery represents 30%, which management would like to double to 50%+ of sales based on benchmarking to pizza concepts. One year following the launch of Uber Eats, the initiative has proved to be increasingly impactful, growing from ~5% of sales at launch to ~10% exiting 2Q as awareness has increased.”
Cowen expects the addition of GrubHub as a partner could accelerate should macroeconomic conditions deteriorate.
Shares of Wingstop (WING) are up 25.66% on year-to-date basis.
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