With its sights set on a 20th consecutive year of same-store sales growth, Wingstop is already savoring a new buy zone. Now WING stock looks to add more spice to its breakout when the purveyor of chicken wings reports Q1 earnings before the open on May 3.
As Wingstop taste-tests the top of its buy zone and a new all-time high, it earns a spot on the IBD 50 and IBD Breakout Stocks Index. It also joins several top-rated restaurant stocks serving up fresh moves of their own.
WING stock just saw its Composite Rating jump to the highest-possible 99, tying Chipotle Mexican Grill. Chipotle soared Wednesday in massive volume after posting a major first-quarter earning surprise. Sandwich specialist Potbelly continues to rise, earning a 98 Composite Rating. Texas Roadhouse is just behind with a 97 as it finds support after grilling up a breakout of its own.
The restaurant group ranks a strong No. 29 among the 197 groups IBD tracks.
See Who Joins WING Stock On The IBD Breakout Stocks Index
Top Funds Crave A Bite Of Wingstop
Founded in 1994 and headquartered in Dallas, Wingstop operates and franchises nearly 2,000 locations worldwide. It opened 228 restaurants in 2022.
Last year, Wingstop grew systemwide sales by 16.8% to roughly $2.7 billion. That marked the restaurant chain's 19th consecutive year of same-store sales growth. From its IPO in June 2015 through the end of last year, WING stock has delivered a spicy 734% return for shareholders.
While it did not join Texas Roadhouse stock and Chipotle Mexican Grill on this month's list of news buys by the best mutual funds, top money managers have a craving for WING stock. It sports a 1.7 up/down volume ratio and three quarters of rising fund ownership. Plus, 81 funds with an A+ or A rating own shares in Wingstop.
In Q4, the company posted a 150% earnings increase to 60 cents a share, marking a third consecutive quarter of accelerating growth. Sales growth also increased during the same period, rising to 46% in the fourth quarter.
When Wingstop reports on May 3, analysts expect an EPS increase of 32%.
Texas Roadhouse and Potbelly report the next day, May 4.
WING Stock Spices Up Buy Zone Ahead Of Earnings
With its relative strength line savoring a new 52-week high, Wingstop cleared a 193.84 buy point in a second-stage consolidation. Volume on the day of the breakout came in 17% above average and higher than the day before.
WING stock gave back some early gains Wednesday buy closed the session up nearly 2% for the day, ending 3% above the entry. It remains near the top of its buy range and solidly above 21-day and 50-day moving averages, both of which are trending upward.
While it's risky to buy stocks just ahead of earnings, see if Wall Street has a taste for how Wingstop reports next month. If it reports well and continues to rise, WING stock could offer investors a chance to wet their beaks.
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Follow Matthew Galgani on Twitter at @IBD_MGalgani.
