Key Points
Wendy's stock has declined by over 71% in the past five years.
Bob Wright, who led a turnaround at Potbelly's, took over as CEO in late May.
It's no secret that Wendy's (NASDAQ: WEN) has been going through a really tough period. Shares are not far off their 52-week low, trading around $6.44 as of this writing. Investors are wondering what is going on with Wendy's stock and whether it will ever rebound.
The main issue with Wendy's is an overall decline in traffic. In the second quarter of 2026, Wendy's reported U.S. same-store sales fell 7%, and traffic decreased 12.5%. The price each customer paid did increase, but ultimately wasn't enough to offset the decline in patrons. It was the sixth consecutive quarter in decline for the 56-year-old American franchise. Even worse, rival Burger King, which Restaurant Brands International owns, saw its sales grow significantly, bucking the negative trends that have been stifling Wendy's and McDonald's.
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Wendy's has a new CEO, Bob Wright, who previously led a fast-food turnaround at Potbelly's. His candid approach will really come to light when his full comeback strategy is announced alongside the company's third-quarter results in early November. Consumers have complained that Wendy's quality, service, and value have declined in recent years. With stiff competition for discretionary dollars, hungry customers are putting Wendy's on the back burner.
Wendy's trailing and forward price-to-earnings ratios are at 10 and 12, respectively. The burger chain's market cap has shrunk to just $1.25 billion. The stock is inexpensive, but just because it's cheap doesn't mean it's worth buying at the moment. I'm going to wait to see what Wright has in store over the coming quarters before fully believing in the Wendy's turnaround.
Catie Hogan has no position in any of the stocks mentioned. The Motley Fool recommends Restaurant Brands International and recommends the following options: long January 2028 $320 calls on McDonald's and short January 2028 $340 calls on McDonald's. The Motley Fool has a disclosure policy.