Is Wendy's The Next GameStop? Retail Investors Trigger 27% Rally In Meme-Like Run

Wendy's is joining the ranks of stocks that have been called a meme stock after its share price jumped double-digits this week. The sharp rally came after a volatile stretch for the company, which had recently been trading near multi-year lows. The factors behind the stock’s rally have been called into question, suggesting that this move might be unsustainable for the asset, especially in the long-term. 

Why Wendy's Became A Retail Trading Target

Wendy’s shares jumped as much as 27% on Wednesday, June 24, after retail traders piled into the stock and turned the fast-food chain into a top gainer. The latest move was reminiscent of the meme-like rally that was started by GameStop back in January 2021. As of midday trading, data screens quoted by Yahoo Finance showed WEN up nearly 30% from the prior close, with heavy volume and a wide intraday range.

Data showed the stock opening at a price of $7.82 after closing the previous trading day at $6.2. One reason behind the sudden move appears to have come from a familiar mix of ingredients that have triggered a similar move in stocks before. These include a battered chart, a low market valuation, high short-interest chatter, and a narrative that the stock was due for a bounce. All of these have culminated in a move that experts have described as a retail-driven “meme-like rally” on June 24.

Similar to GameStop back in 2021, there has been a lot of chatter around Wendy’s on the r/WallStreetBets forum on Reddit. This forum is important because it is where the chatter behind GameStop originated and was the key driver of the retail push that sent the stock price surging 1,500% in a single month. The GME stock had begun at $4.31 and reached a high of $120.75 at its peak.

If Wendy’s stock follows the same trajectory as GameStop, then a similar 1,500% rally would mean that the price would cross $90. The stock is also being highly shorted in the market, with a 34% short interest in free float, which could create the perfect situation for a short squeeze. 

Unlike GameStop, though, Wendy's is a mature restaurant company with cash flow, dividends, and a franchise-heavy business model. Given this, it is highly unlikely that the stock can continue its upward momentum on just online enthusiasm alone, unless there is a change in its fundamentals.

What The Fundamentals Are Saying

Wendy’s has started to feel some burn with rising costs weighing down the company. On the company’s Q1 call, management said traffic in US restaurants remained under pressure and that higher beef and labor costs continued to weigh on margins, even as Project Fresh initiatives began to show progress. The company also reaffirmed 2026 guidance for roughly flat global systemwide sales, adjusted EBITDA of $460 million to $480 million, adjusted EPS of $0.56 to $0.60, and free cash flow of $190 million to $205 million.

The company’s latest first-quarter 2026 results, released May 8, showed global systemwide sales down 5.5%. There was also a recorded 7.8% decline in US same-restaurant sales, according to the company’s filing with the SEC. However, Wendy's said international systemwide sales rose 6.0% in the quarter, and management reaffirmed full-year guidance.

WEN was trading with a market cap of around $1.55 billion at intraday levels, a trailing P/E of 10.6, and a dividend yield of close to 9%. Such a combination can be catnip for retail traders looking for a stock that is both beaten down and easy to frame as a comeback story. The same page also showed average volume of roughly 9.8 million shares, while intraday volume had already surged past 93 million shares. This puts it in a unique position for a possible comeback.