Restaurant chain Wingstop has been one of the great post-pandemic success stories. The stock is trading north of $350 a share, up over 700% from its March, 2020, low just above $44. The company’s concept is obviously popular with customers, given its 21 consecutive years of same store sales growth and rapidly increasing store count.
It wasn’t a smooth ride, though. The post-pandemic uptrend included not one, but two 50%+ selloffs and several smaller, but still significant ones, which saw its valuation reduced by roughly a third. According to analysts estimates, Wingstop is on track to grow revenue by another 16% this year. The stock, however, is trading at 14 times sales and 90 times earnings, which we think makes it more of a risky gamble than a prudent investment. In addition, the Elliott Wave chart below suggests that another notable decline could be just around the corner.
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This weekly chart reveals the stock’s entire history since Wingstop went public in 2015. It shows an almost complete five-wave impulse pattern, marked (1)-(2)-(3)-(4)-(5), where the five sub-waves of (1) and (3) are also visible. The pandemic crash of March, 2020, concluded wave 2 of (1). Wave (2) coincided with the economic slowdown of 2022, demonstrating just how vulnerable such fast-growing businesses can be in a recession.
Wave (3) was, as usual, a wonder to behold. It lifted Wingstop stock to an all-time high of $434 in September, 2024, before wave (4) dragged it down to $204 in April, 2025. Fourth waves are rarely this deep, but what matters is that the price didn’t touch the top of wave (1), which would’ve been a violation of the Elliott Wave rules. This allows us to conclude that the current sharp recovery to over $350 must be part of the fifth and final wave.
A new record near $500 a share makes sense in wave (5). Once there, however, it would be time for another major decline. Just like the impulses in waves (1) and (3) were followed by corrections in (2) and (4), respectively, so should this entire five-wave structure in wave I give way to a big retracement in wave II. Given that corrections usually erase most or all of the fifth wave, a return to the support near $220 wouldn’t be a surprise. Wingstop’s obscene valuation makes such a selloff even more likely.
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