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The Wendy's Company (WEN) Intrinsic Value

DCF-based fair value calculation with Bear, Base, and Bull scenarios

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The Wendy's Company (WEN)

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Intrinsic Value (DCF)

Current$8.54
→
Intrinsic$7.69
-10%
0
$0.00$7.69$22.97
Market implies 11% growth for 5 years
WEN appears fairly valued — current price aligns with our DCF estimate.
At $9, the market prices in 11% annual cash flow growth — a moderate expectation aligned with historical trends (10%).
Discount ↓Growth →6%8%10%12%
8%$13$15$18$21
10%$4$6$8$10
12%$0$0$2$3
14%$0$0$0$0

Bull Case

  • Bull case ($23) offers 169% upside at 12% growth, 9% discount
  • Conservative 10% growth assumption is achievable based on track record

Bear Case

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    5-Year Free Cash Flow Projection

    Year 1$287.98M
    Year 2$317.85M
    Year 3$350.82M
    Year 4$387.21M
    Year 5$427.37M
    Terminal$6.29B

    📐 Model Inputs

    Growth Rate10.4%5Y CAGR (cascade: 5Y→3Y→TTM)
    Discount Rate10.0%WACC estimate
    Terminal Growth3.0%Perpetuity rate
    Base Free Cash Flow$260.92MTTM actual
    Bear g×0.8, r+2%
    Base Historical CAGR
    Bull g×1.2, r−1.5%
    ℹ️

    DCF estimates based on historical growth rates extrapolated forward. See FAQ below for full methodology.

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    Frequently Asked Questions

    Is WEN stock undervalued or overvalued?
    🟡 FAIRLY VALUED

    WEN trades at $8.54, within 10% of our $7.69 intrinsic value estimate. At 10.0% WACC and 10.4% FCF growth, the market is pricing in assumptions roughly aligned with the 5-year historical CAGR. The valuation range spans $0.31 (bear) to $17.77 (bull).

    What is WEN's intrinsic value?

    Using a 5-year DCF model: Base FCF of $261M, projected at 10.4% 5Y CAGR (best of revenue, EPS, or FCF growth), discounted at 10.0% WACC, with 3.0% terminal growth. Terminal value calculated via Gordon Growth Model: TV = FCF₅ × (1+g) / (WACC−g). After deducting $3.64B net debt and dividing by 0.21B shares: Bear $0.31 | Base $7.69 | Bull $17.77. Current price $8.54 implies -9% to base case.

    How is WEN's fair value calculated?

    DCF Methodology:

    ① Project FCF years 1-5 using 10.4% growth derived from 5-year historical CAGR (best of revenue, EPS, or FCF growth, with 8% floor and 25% cap).

    ② Calculate terminal value at year 5 using perpetuity growth model with g=3.0%.

    ③ Discount all cash flows to PV using WACC=10.0%.

    ④ Sum PV of explicit period + PV of terminal value = Enterprise Value ($5.22B).

    ⑤ Subtract net debt, divide by shares outstanding.

    Sensitivity analysis available above—adjust WACC ±2% or growth ±3% to stress-test the valuation. Implied EV/FCF multiple: 20.0x.