Wingstop has plans to take the planet by storm, in addition to despite some recent analyst downgrades, CNBC’s Jim Cramer can be inclined to get behind the growing restaurant chain.
“Management’s got a plan for world domination, in addition to who am I to disagree with them?” the “Mad Money” host said on Friday. “They already have a pipeline of 0 international locations lined up in 13 countries. in which’s huge. Right today, Wingstop only has about 1,100 locations total.”
yet not everyone agrees with Cramer’s assessment. Last week, a BTIG analyst downgraded Wingstop’s stock to “hold” via “buy.” Goldman Sachs analysts followed which has a similar downgrade This kind of week.
The take-downs sent shares of Wingstop, up 82 percent for 2018, down roughly 6 percent via their recent highs. So, to try in addition to pare investors’ concerns about whether or not to take profits, Cramer reminded them of the bull case.
With steady same-store sales growth, healthy brand new store growth in addition to a solid regional-to-international story, Wingstop’s potential can be huge despite what he admitted was a lofty valuation (shares of Wingstop currently trade at 67 times next year’s earnings estimates).
“You need to be willing to judge Wingstop based on what we call the TAM, or the total addressable market, … meaning all of the places where they can potentially put up successful brand new restaurants, in addition to not merely its cost-to-earnings multiple,” the “Mad Money” host argued.
in addition to if Wingstop meets its long-term growth targets, which include boosting the store count by over 10 percent per year, investors will kick themselves for not buying into the story sooner, he said.
“If they can actually hit their growth targets, then when we look back at This kind of moment a few years down the road, I think the stock will look cheap in retrospect,” Cramer said.
“If you’ve owned the item all the way up, … OK, ring the register on part of your position,” he continued. “yet if you don’t have any Wingstop here, I’m betting in which the recent pullback will turn out to be a great buying opportunity. Ideally, the item goes even lower in addition to you can use the weakness to buy more.”
Shares of Wingstop settled at $66.36 per share on Friday, up 0.64 percent, though still a stone’s throw via the stock’s 52-week high of $70.74.