Wingstop is Thursday's IBD Stock Of The Day. The wings takeout and delivery chain was added to the IBD 50 list of top-performing stocks this week. WING stock rebounded above a key level Thursday, offering an aggressive entry.
The Dallas-based aviation-themed chain has nearly 1,900 restaurants worldwide where it serves up 11 different flavors of classic and boneless chicken wings, according to its website. It operates 225 locations across seven international markets, including Mexico, Colombia, Panama, Singapore and the U.K.
Of the 1,673 restaurants in the U.S., 42 are company-owned and the rest are franchises, according to Wingstop's Q3 earnings report.
Wingstop earnings and sales growth has accelerated in the past two quarters, to 55% in Q2 and 41% in Q3.
Wingstop raised its fiscal 2022 outlook following its third-quarter results. It pegged EPS at $1.61-$1.63 vs. its prior target of $1.55-$1.57. Wingstop revised its total new store openings up by five to 225-235. The wing chain didn't include a revenue forecast, but it expects low-single-digit domestic same-store sales growth.
For its fourth-quarter earnings on Feb. 22, analysts expect Wingstop earnings to skyrocket nearly 71% to 41 cents per share, among the company's implied guidance of 37-39 cents. Sales are seen rising 41% to $100.8 million.
Wingstop ranks fourth in the Retail-Restaurant Industry group, according to IBD Stock Checkup.
Chipotle Mexican Grill leads the group, with CMG stock up more than 15% this month. Among other restaurant peers, McDonald's is up 3.6% over the month and Wendy's is down 3%. Yum Brands, which operates KFC, Taco Bell and Pizza Hut. is up less than 1% during the period.
All four restaurants stocks are near buy points. McDonald's earnings are next week, with Chipotle and Yum the following week.
WING Stock
WING stock is in "consolidation," which is a catchall term for attractive chart patterns that don't quite conform to proper base definitions. The current trading pattern has a 170.97 buy point, according to MarketSmith.
Shares rose 3.5% to 155.46 on Thursday. Investors could use today's push above Wingstop's 50-day moving average as an aggressive entry opportunity.
A close below the 50-day line would mark an exit point.
Wingstop's relative strength line has fallen off a bit after moving to highs in early January. WING stock has an 89 RS Rating out of 99, indicating it's outperformed most of its peers over the last 52 weeks.
The company's strong earnings translate to a near-perfect 95 EPS Rating. And it has a 90 Composite Rating, which combines a number of technical indicators into one easy-to-read score.
WING stock is up nearly 11% this month.
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