Wendy's (WEN) valuation at a glance
Wendy's (WEN) trades below the fair value estimate shown here. At $6.26 versus a $8.00 estimate, that is a 28% upside.
- Price
- $6.26
- Fair value estimate
- $8.00
- Upside
- +28%
- Forward P/E
- 9.8×
- Market cap
- $1.19B
- P/S (TTM)
- 0.5×
CompaniesWEN
Overview
WEN
The Wendy's Company
Consumer CyclicalRestaurantsQSRFranchiseTake-Private CandidateDividendMeme Stock History
$6.26+1.5%
Market Cap
$1.19B
SEC 10-K (FY2025, CIK 0001060349) + 10-Q (Q1 2026)
P/E (TTM)
8.1×
via financials
Rev Growth YoY
3.3%
+3.3%SEC filing
Gross Margin
34.1%
SEC filing
FCF Yield
11.0%
calculated
Upside to FV
+27.8%
vs fair value
Conviction
2/5Cheapest QSR franchise at 8× P/E with 11% FCF yield and 9% dividend, but $4.1B debt load, -7.8% US SSS, and Piotroski 4/9 make this a value trap unless Trian's take-private materializes. After-hours +20% on WSB momentum (Jun 23).
Research Depth
ScreeningDeep ResearchFull Model
Data as of 2026-06-24
Quality Snowflake
Overall 57/100
Value5/5
Future1/3
Past4/4
Health2/4
Dividend0/1
Each axis scores the checks for which data is available (filled = pass, hollow = no data). Computed from the sourced metrics on this page, not a third-party rating.
Thesis
Wendy's trades at 8.1× trailing earnings — cheapest in the QSR universe — while generating $131M FCF and paying a 9% dividend yield. The market prices it for structural decline after U.S. same-store sales fell -7.8% in Q1 2026 and the dividend was cut 44% in mid-2025. Trian Fund Management (16% + personal stake, ~24% combined) is actively pursuing a take-private deal with Middle Eastern co-investors (FT, May 12, 2026), which provides a potential floor. The stock surged +20% after-hours on Jun 23 on WSB retail momentum — WEN was the original WSB food stock (Jun 2021: +26% in a day, fully reversed within weeks). But the $4.1B debt load (35× equity, EV 4.2× market cap) means any cash flow deterioration could trigger a debt spiral. This is a binary outcome: Trian take-private at $10-12 = +60-90% upside, or continued SSS decline with no deal = dividend cut and sub-$5. Piotroski F-Score 4/9 — five of nine quality metrics are failing.
Bull Case
ValuationCheapest P/E (8.1×) and P/S (0.54×) in the QSR peer group. FCF yield of 11% is best-in-class. Peer median P/E is 24×.
Take-PrivateTrian Fund Management (Nelson Peltz, 16% stake) actively seeking Middle Eastern investors for a leveraged buyout. Board seats give Trian operational control. Typical QSR take-private premiums are 30-50%.
Franchise Model~95% franchised system generates royalties regardless of company-store performance. Franchise fees + royalties provide a floor under cash flow even in downturns.
Dividend9% yield at current price. Even after the 44% cut, payout ratio is 73% of earnings — still covered by FCF ($131M FCF vs $107M annual dividend).
InternationalChina franchise agreement for 1,000+ restaurants over the next decade. International systemwide sales +6.0% in Q1 2026 while U.S. fell.
WSB / RetailAfter-hours +20.4% on WSB momentum (Jun 23). 37% short float with 3.69-day short ratio creates squeeze mechanics. S3 Partners squeeze score: 100/100. Borrow utilization: 92%. Effective tradeable float may be as low as 20-30M shares (94% inst + 9% insider locked). WEN is culturally embedded in WSB ('Sir, this is a Wendy's'). Historical precedent: Jun 2021 WSB rally drove WEN +26% in one day. Caution: that rally fully reversed.
Bear Case
LeverageDebt/equity ratio of 3,563% — $4.1B total debt against $117M stockholders' equity. Interest expense of $127M/year consumes 37% of EBIT. Any cash flow deterioration risks covenant breach.
SSS DeclineU.S. same-store sales fell -7.8% in Q1 2026 — worst in the QSR peer group. Global systemwide sales -5.5%. This is not a cyclical dip; traffic is structurally declining.
Quality ScorePiotroski F-Score of 4/9: ROA declining, gross margins compressing, debt increasing, current ratio worsening, asset turnover falling. Five of nine quality metrics failing.
Dividend RiskDividend was already cut 44% in mid-2025 (from $0.25 to $0.14/quarter). If SSS decline continues, another cut is likely. The 9% yield is a distress signal, not a gift.
Take-Private UncertaintyNo formal Trian bid has been submitted. Financing a take-private of a company with $4.1B existing debt during elevated interest rates is extremely challenging.
Key Metrics
Market Cap
$1.19B
SEC 10-K (FY2025, CIK 0001060349) + 10-Q (Q1 2026)
Enterprise Value
$5.01B
calculated
Revenue (TTM)
$2.19B
SEC filing
P/E (TTM)
8.1×
via financials
Forward P/E
9.8×
consensus
P/S (TTM)
0.5×
via financials
P/B
10.1×
via financials
EV/EBITDA
10.5×
calculated
PEG
1.1×
calculated
Revenue Growth
3.3%
SEC filing
Gross Margin
34.1%
SEC filing
Operating Margin
11.4%
SEC filing
Net Margin
6.8%
SEC filing
Free Cash Flow
$131M
SEC filing
FCF Yield
11.0%
calculated
Debt / Equity
3563.0×
SEC filing
Current Ratio
1.8×
SEC filing
Short Interest
37.0%
exchange
Institutional Own.
94.4%
13F
Insider Own.
9.1%
proxy
Shares Out.
190.0M
SEC filing
Float
157.0M
exchange
Valuation
Price vs Fair Value
Bear$4.50
Base$8.00
Bull$12.00
Now $6.26
Bear Case
$4.50
Continued SSS decline (-5% annually), another dividend cut, no takeout. 6× depressed earnings.
Base Case
$8.00
Analyst median target. SSS stabilization + franchise royalty floor. 10× normalized EPS.
Bull Case
$12.00
Trian take-private at 30-50% premium, or SSS recovery to positive. 15× earnings.
DCF Summary
Discount Rate
12%
Terminal Growth
1.5%
Projection
5y
Rev CAGR
2%
Intrinsic / Share
$7.80
Margin of Safety
22%
Historical Multiples
| Year | P/E | P/S | EV/EBITDA |
|---|---|---|---|
| FY22 | 11.3× | 0.6× | 10.0× |
| FY23 | 9.8× | 0.5× | 9.1× |
| FY24 | 8.6× | 0.5× | 9.0× |
| FY25 | 7.2× | 0.6× | 9.6× |
| TTM · | 8.1× | 0.5× | 10.5× |
Current multiple highlighted vs trailing history.
Peer Comparison
| Ticker | Mkt Cap | P/E | P/S | EV/EBITDA | Rev Growth | Gross Mgn | Net Mgn |
|---|---|---|---|---|---|---|---|
| WEN | $1.2B | 8.1× | 0.5× | 10.5× | +3.3% | 34.1% | 6.8% |
| QSR | $32.7B | 23.0× | 3.4× | 14.3× | +7.3% | 33.9% | 10.0% |
| MCD | $193B | 22.4× | 7.0× | 16.6× | +9.4% | 57.3% | 32.6% |
| YUM | $41.8B | 24.5× | 4.9× | 18.1× | +15.2% | 45.7% | 20.5% |
| DPZ | $9.4B | 16.3× | 1.9× | 14.0× | +3.5% | 28.7% | 11.9% |
| JACK | $221M | – | 0.1× | 12.2× | -4.3% | 27.0% | 2.5% |
| DIN | $422M | 28.9× | 0.5× | 10.6× | +4.8% | 40.1% | 1.8% |
Financials
| Line Item | FY2024 | FY2025 | YoY | Q1 2026 |
|---|---|---|---|---|
| Total Revenue | $2,246M | $2,177M | -3.1% | $541M |
| Cost of Revenue | $1,617M | $1,588M | -1.8% | $402M |
| Gross Profit | $629M | $589M | -6.4% | $138M |
| SG&A | $95M | $85M | -9.7% | $32M |
| D&A | $158M | $171M | +8.2% | $45M |
| Operating Income | $388M | $354M | -8.8% | $64M |
| Interest Expense | $124M | $126M | +2.1% | $34M |
| Pretax Income | $272M | $227M | -16.6% | $34M |
| Tax Provision | $78M | $62M | -20.5% | $11M |
| Net Income | $194M | $165M | -15.1% | $23M |
| Diluted EPS | $0.95 | $0.85 | -10.5% | $0.12 |
| Item | FY2025 | Notes |
|---|---|---|
| Cash & Equivalents | $301M | Includes restricted cash $137M |
| Current Assets | $618M | Receivables $117M, inventory $7M |
| Goodwill | $774M | From Tim Hortons/Arby's era acquisitions |
| Intangible Assets | $1,171M | Franchise rights, trademarks |
| Total Assets | $4,957M | — |
| Current Liabilities | $351M | AP $31M, accrued $59M |
| Long-Term Debt | $2,731M | Securitized notes |
| Capital Lease Obligations | $1,385M | Operating leases |
| Total Debt | $4,145M | 3,563% D/E ratio |
| Stockholders' Equity | $117M | Negative tangible book ($-1.83B) |
| Total Liabilities + Equity | $4,957M | — |
| Component | FY2024 | FY2025 |
|---|---|---|
| Operating Cash Flow | $355M | $345M |
| Capital Expenditure | ($94M) | ($102M) |
| Free Cash Flow | $261M | $243M |
| Dividends Paid | ($204M) | ($130M) |
| Share Buybacks | ($77M) | ($201M) |
| Debt Repayment | ($50M) | ($479M) |
| Debt Issuance | $0 | $476M |
| Net Change in Cash | ($77M) | ($150M) |
Source: SEC 10-K (FY2025, filed Feb 2026) + 10-Q (Q1 2026, filed May 2026). All figures in USD.
Catalysts
Jun 23-24
Markethigh relevance
WSB retail rally — after-hours +20.4% to $7.53
S3 squeeze score 100/100. 37% short float (50.3M shares, +8.6% MoM). Borrow utilization 92%. Effective float ~20-30M (94% inst-locked). After-hours +20.4% ($6.26→$7.53). Put/Call OI 1.38 (inst hedging) vs P/C volume 0.38 (retail call buying). Base rate of WSB squeeze success: ~5-10%. Borrow rate only 5.88% — shorts comfortable. 2021 WEN rally reversed fully.
Jun 23
Regulatory
New CFO Steve Cirulis appointed
Wendy's named Steve Cirulis as Chief Financial Officer and Chief Strategy Officer effective Jun 23. Source: Wendy's IR press release.
H2 2026
M&Ahigh relevance
Trian Fund take-private bid
Nelson Peltz (16% + personal stake, combined ~24%) actively seeking Middle Eastern co-investors. First reported by FT on May 12, 2026. No formal bid. Key risk: financing $4.1B existing debt at current rates.
Aug 7
Earningshigh relevance
Q2 2026 earnings (confirmed date)
U.S. SSS trend is the swing factor. Q1 was -7.8%. Any improvement toward -3% would trigger re-rating. New CFO's first earnings call — watch for strategic pivots.
Q4 '26
Product
China franchise rollout begins
Largest-ever franchise agreement for 1,000+ restaurants. 'Project Fresh' turnaround initiative.
Risks
| Risk | Category | Severity | Probability | Impact on Thesis |
|---|---|---|---|---|
| Extreme leverage — $4.1B debt on $1.2B market cap, 3,563% D/E | Capital Structure | Critical | High | Interest expense consumes 37% of EBIT. Any cash flow deterioration could trigger covenant breach or force equity dilution. |
| Accelerating U.S. SSS decline (-7.8% Q1 2026) | Execution | High | High | Traffic declining structurally. Consumer trade-down to value competitors. Menu innovation has not reversed trend. |
| Dividend already cut 44% — further cuts likely if SSS doesn't stabilize | Dividend | High | Medium | Income investors exit, removing a key buyer base. Would accelerate price decline. |
| Take-private financing risk in high-rate environment | M&A | Medium | Medium | Trian may not secure financing. Failed take-private attempts typically cause 15-25% drops. |
| Commodity cost inflation (USDA revised fertilizer +13%) | Market/Macro | Medium | High | Wendy's fresh-beef-focused menu has higher commodity exposure than frozen-patty competitors. |
Technical Snapshot
52-Week Range
$6.07$6.26$12.33
RSI (14)
28
oversold
50-Day MA
$7.11
-12.0%below
200-Day MA
$8.00
-21.8%below
Avg Vol (30d)
9.9M
-24%vs average
Support Levels
$6.07$5.50$5.00
Resistance Levels
$7.11$8.00$8.50
Price path reconstructed from the 52-week range, current price, and 50/200-day moving averages. Connect a live market-data feed for production.
Ownership & Insider Activity
Top Institutional Holders via 13F filings
| Institution | Shares | % Held | Chg QoQ | Filing |
|---|---|---|---|---|
| Trian Fund Management | 30.4M | 16.0% | – | |
| BlackRock | 21.7M | 11.4% | – | |
| Vanguard | 16.1M | 8.4% | – | |
| Morgan Stanley | 7.6M | 4.0% | – | |
| Wells Fargo | 6.9M | 3.6% | – | |
| Schwab | 6.5M | 3.4% | – | |
| Harris Associates | 5.9M | 3.1% | – | |
| State Street | 5.5M | 2.9% | – |
Insider Activity
No open-market insider buying detected. All recent transactions are routine stock awards/grants to directors. Nelson Peltz (Trian) holds 16% via fund, not personal Form 4. Harris Associates reduced position by 40.5% — notable large-holder exit.
| Name | Title | Action | Shares | Price | Date | Value |
|---|---|---|---|---|---|---|
| Directors (7) | Board | Grant | ~147K | $0 (stock awards) | May 2026 | ~$1.0M |
| Directors (4) | Board | Grant | ~10K | $7.14 | Apr 2026 | ~$70K |
Peer Comparison
| Ticker | Mkt Cap | P/E | P/S | EV/EBITDA | Rev Growth | Gross Mgn | Net Mgn |
|---|---|---|---|---|---|---|---|
| WEN | $1.2B | 8.1× | 0.5× | 10.5× | +3.3% | 34.1% | 6.8% |
| QSR | $32.7B | 23.0× | 3.4× | 14.3× | +7.3% | 33.9% | 10.0% |
| MCD | $193B | 22.4× | 7.0× | 16.6× | +9.4% | 57.3% | 32.6% |
| YUM | $41.8B | 24.5× | 4.9× | 18.1× | +15.2% | 45.7% | 20.5% |
| DPZ | $9.4B | 16.3× | 1.9× | 14.0× | +3.5% | 28.7% | 11.9% |
| JACK | $221M | – | 0.1× | 12.2× | -4.3% | 27.0% | 2.5% |
| DIN | $422M | 28.9× | 0.5× | 10.6× | +4.8% | 40.1% | 1.8% |
Recognizable sector comparables. Multiples are trailing-twelve-month figures from market and exchange data; lowest multiple in each column highlighted. Loss-making peers show no P/E.
Research Notes
2026-06-24Internal
VALIDATION SPRINT 2: 62 metrics verified, 8 corrections applied
Sprint 2 deep validation against 4 sources (yfinance, StockAnalysis, Finviz, Yahoo Finance). 54/62 exact matches (87%). Corrections: currentRatio 1.76→1.83, shortInterest 30%→37% (yfinance primary), ma50 7.01→7.11, ma200 7.71→8.00, short ratio 5.15→3.69 days. S3 Partners squeeze score 100/100. Borrow utilization 92%. Altman Z-Score 1.01 (distress boundary). Piotroski confirmed 4/9. Total debt $4.12B on $1.19B mcap = equity is a leveraged call option.
2026-06-24Reddit / WSB + Yahoo Finance + S3 Partners
WSB rally confirmed — squeeze mechanics validated
After-hours +20.4% to $7.53 on WSB momentum. S3 Partners rates WEN squeeze score 100/100 with 92% borrow utilization. Short interest 37% of float (50.3M shares, +8.6% MoM — shorts are piling in). Days to cover: 3.69-5.1 (depends on volume window). Effective tradeable float may be 20-30M shares (94% inst + 9% insider locked). Put/Call OI ratio 1.38 (put-heavy institutional hedging) vs P/C volume ratio 0.38 (call-heavy retail buying). HOWEVER: base rate of 'next GME' picks succeeding is ~5-10%. No coordinated retail army. Borrow rate only 5.88% (not painful for shorts). Options liquidity poor. This is a take-private event play with squeeze convexity, NOT a pure meme squeeze.
2026-06-23Wendy's IR
New CFO Steve Cirulis appointed
Wendy's named Steve Cirulis as Chief Financial Officer and Chief Strategy Officer, effective June 23, 2026. This is his first earnings call will be Q2 2026 (Aug 7). Source: official Wendy's IR press release.
2026-06-22yfinance + market data
June 22 crash: -9.3% on 18.5M volume (2.4× avg)
WEN dropped from $6.80 to $6.17 on June 22, the largest single-day decline in months, on 18.5M shares (2.4× the 30-day average of 7.7M). Touched 52-week low of $6.07 intraday. Catalyst: USDA farm production cost forecast showing fertilizer estimates revised up 13%. Wendy's fresh-beef menu has higher commodity exposure than frozen-patty competitors (MCD, BK).
2026-05-12FT / Market reports
Trian take-private pursuit — FT original source
Financial Times reported (May 12, 2026) that Nelson Peltz's Trian Fund Management is seeking Middle Eastern co-investors to finance a potential take-private deal for Wendy's. Trian holds 16.24% via fund + Peltz personal stake totaling ~24% combined. No formal bid submitted. Stock bounced +10.6% in May on the news but has since given back all gains. Multiple outlets confirmed: Hedgeweek, Quartz, US News.
2026-05SEC 10-Q + earnings call
Q1 2026: Revenue $541M, EPS $0.12, SSS -7.8%
Revenue $540.6M (beat $520.48M estimate, +3.3% YoY). EPS $0.12 (beat $0.10 estimate). U.S. same-store sales declined -7.8% — significantly worse than -2.8% prior year. Adjusted EBITDA $111.3M. International SSS +6.0%. FY2026 EPS guidance reaffirmed: $0.56-$0.60. China franchise agreement for 1,000+ restaurants announced ('Project Fresh').
2026-06-24yfinance + Finviz
Cross-source data discrepancies documented
Margin definitions differ: StockAnalysis reports franchise-model margins (GM 63%, OpM 22%, NM 15%) reflecting franchisor economics; yfinance/Finviz/Yahoo report consolidated GAAP margins (GM 34%, OpM 11%, NM 6.8%) including company-operated store COGS. Both are correct — different calculation bases. Investors should use GAAP figures. Forward P/E varies by source (9.8-11.0) due to different EPS estimate pools. Net income: $148.6M is GAAP; $325.6M on StockAnalysis likely includes different line items. All figures on this page use GAAP.
2025-06SEC 10-K
Dividend cut 44%: $0.25 to $0.14/quarter
Wendy's reduced quarterly dividend from $0.25 to $0.14 per share in mid-2025, a 44% reduction. Current annual run-rate is ~$107M vs prior ~$200M. At $6.26, yield is 8.95% (Finviz/Yahoo confirmed). Payout ratio: 73% of GAAP earnings, but well-covered by $131M FCF.
Wendy's valuation questions
Is Wendy's (WEN) stock undervalued?
Against the fair value estimate shown on this page, Wendy's trades below: $6.26 today versus a $8.00 estimate, about +28%. The methodology and per-scenario sources are set out in the Valuation section. Treat it as research, not advice, and do your own homework.
What is Wendy's's fair value?
The fair value estimate shown for WEN is $8.00. Its valuation scenarios span bear $4.50, base $8.00, bull $12.00. See the Valuation section for the basis of each.
What is Wendy's's forward P/E ratio?
Wendy's (WEN) trades at a forward P/E of 9.8×, and 0.5× trailing sales.
What is Wendy's's market cap?
Wendy's (WEN) has a market capitalization (its market value, often searched as "net worth") of $1.19B, and an enterprise value of $5.01B.
What is the bull and bear case for WEN?
Valuation scenarios: bull $12.00, base $8.00, bear $4.50. Each reflects a distinct set of assumptions; the drivers and sources are detailed in the Valuation section above.