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Wingstop's annual buying opportunity has arrived
Almost direct relationship between wing prices and Wingstop stock price
George Babis
November 06, 2024
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Over the past decade, Wingstop ($WING) has outperformed most publicly traded U.S. restaurant stocks. Recent entries to the fast-casual and quick-service restaurant space, like Cava ($CAVA) and Sweetgreen ($SG), have shown strong share price performance, but Wingstop still leads in revenue growth despite its later stage in the growth cycle.
Despite surpassing revenue expectations in Q3, Wingstop's stock saw a roughly 20% drop due to disappointing profitability metrics, primarily driven by unexpectedly high costs. However, these cost issues are part of a recurring pattern where Wingstop’s stock dips annually due to such 'unexpected' costs, providing a solid buying opportunity for long-term investors.
All these yearly selloffs are caused by ‘unexpected’ increased costs that eat up profits and send the stock tumbling in the near term, and the recent meltdown is no different. It will likely prove to be another great buying opportunity for long-term investors and here’s why.
