Wingstop Sets Up for Secondary Offering

Wingstop Inc. (NASDAQ: WING) filed an S-1 form with the U.S. Securities and Exchange Commission (SEC) for a secondary offering. The company plans to offer 5 million shares with an overallotment option for an additional 750,000 shares. At the most recent closing price of $23.09, the entire offering is valued up to $132.77 million.

The underwriters for this offering are Morgan Stanley, Jefferies and Baird.

This company had a solid initial public officer in 2015, but the stock has sold off, leaving investors an outstanding entry point. The company franchises and operates restaurants under the Wingstop name that specialize in cooked-to-order, hand-sauced and tossed chicken wings. As of May 06, 2015, it operated approximately 750 restaurants in the United States, Mexico, Russia, Singapore, the Philippines and Indonesia.

Analysts note that the company already pre-announced positive numbers for the most recent quarter. They also point to the solid unit growth, which was 19% for the year, with same-store-sales of 5.9% for the quarter. Online ordering is growing smartly and carries a 25% increase in the check. They also are fans of the tech play, along with a unique brand that’s differentiated in customers and real estate.
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The company will not receive any proceeds from this offering.

So far in 2016, Wingstop has remained relatively flat, with the stock up roughly 1% year to date. Over the past six months, the stock is down 11%.

Shares of Wingstop were down 3.2% at $22.36 on Friday, with a consensus analyst price target of $29.43 and a 52-week trading range of $20.31 to $35.96.