What Happened?
Shares of fast-food chain Wingstop (NASDAQ: WING) jumped 7.1% in the afternoon session after the company reported fourth-quarter 2025 earnings that saw profits significantly beat Wall Street's expectations, even as revenue slightly missed and a key sales metric declined.
The chicken wing chain posted an adjusted earnings per share (EPS) of $1.00, easily surpassing analyst estimates of $0.83. This strong profitability came alongside revenue of $175.7 million, which, while up 8.6% year-over-year, fell just short of the $177.8 million consensus estimate. Investors appeared to focus on the bottom-line strength, which was also reflected in an adjusted EBITDA figure that beat expectations by 6.4%. This positive sentiment overshadowed a notable 5.8% year-over-year decline in same-store sales, a metric measuring performance at established locations. The significant earnings beat suggested strong operational efficiency, giving investors reason for optimism despite the mixed top-line results.
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What Is The Market Telling Us
Wingstop’s shares are extremely volatile and have had 30 moves greater than 5% over the last year. In that context, today’s move indicates the market considers this news meaningful but not something that would fundamentally change its perception of the business.
The previous big move we wrote about was 8 days ago when the stock dropped 4.9% on the news that the company received downgrades from at least two analyst firms due to concerns about its future sales and financial pressure on its core customers. Brokerage TD Cowen lowered its rating on the stock to "Hold" from "Buy" and cut its price target to $285 from $310. The firm explained that its survey data showed that Wingstop's key customers, who are typically younger and have lower incomes, remained under financial pressure. As a result, TD Cowen expected same-store sales to fall by 0.5% in 2026, which was well below the growth that analysts had previously projected. Adding to the negative sentiment, Raymond James also cut its rating on the stock to "outperform" from "strong buy.".
Wingstop is up 6.7% since the beginning of the year, but at $274.13 per share, it is still trading 28.1% below its 52-week high of $381.46 from June 2025. Investors who bought $1,000 worth of Wingstop’s shares 5 years ago would now be looking at an investment worth $1,965.
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