Wingstop (WING) to Release Q3 Earnings: A Hit or Miss?

Dallas-based Wingstop, Inc.WING is set to report third-quarter 2016 results on Nov 1, after the market closes . This will be the company's sixth quarterly results after its IPO in Jun 2015.

Last quarter, this restaurant operator posted a positive earnings surprise of 7.14%. In fact, the company has surpassed earnings estimates in each of the trailing four quarters, with an average beat of 15.46%.

Let us see what's in store for the company this quarter.

Factors to Consider This Quarter

Wingstop, which operates as a chicken wings specialist, serves classic and boneless wings with bold flavors. The company has been reporting positive comps for over 12 years on the back of menu innovation and solid unit development. We expect the trend to continue in the to-be-reported quarter as well..

Further, the company's investments in technology to grow online ordering along with migration to a national advertising platform should further boost the quarter's results. Particularly, Wingstop continues to grow its online ordering mix and has recently partnered with a firm called Conversable to make it more convenient for social media users, which is expected to increase traffic.

However, higher costs and expenses are likely to dent the company's profits in the third quarter. Moreover, a choppy sales environment in the overall restaurant space might limit revenue growth.

WINGSTOP INC Price and EPS Surprise

WINGSTOP INC Price and EPS Surprise | WINGSTOP INC Quote

Earnings Whispers

Our proven model does not conclusively show that Wingstop is likely to beat earnings this quarter. This is because a stock needs to have both a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) for this to happen. That is not the case here, as you will see below. Please check our Earnings ESP Filter that enables you to find stocks that are expected to come out with earnings surprises.

Zacks ESP: Earnings ESP for Wingstop is 0.00%. This is because both the Most Accurate estimate and the Zacks Consensus Estimate are pegged at 12 cents.

Zacks Rank: Wingstop carries a Zacks Rank #2 which increases the predictive power of ESP. However, the company's 0.00% ESP makes surprise prediction difficult.

Note that we caution against stocks with a Zacks Rank #4 and #5 (Sell rated) going into the earnings announcement, especially when the company is seeing negative estimate revisions momentum.

Stocks to Consider

Here are some companies in the restaurant space that investors may consider, as our model shows that they have the right combination of elements to post an earnings beat this quarter:

The Wendy's Company WEN has an Earnings ESP of +10.00% and a Zacks Rank #2. You can see the complete list of today's Zacks #1 Rank stocks here .

Fogo de Chao, Inc. FOGO has an Earnings ESP of +13.33% and a Zacks Rank #3.

DineEquity, Inc. DIN has an Earnings ESP of +2.16% and a Zacks Rank #3.

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DINEEQUITY INC (DIN): Free Stock Analysis Report

WINGSTOP INC (WING): Free Stock Analysis Report

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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