Buffalo Wild: The Rodney Dangerfield of Wall Street

Fair's fair. But when the market treats a stock unfairly, you load up on cheap shares.

Since October 2006, Buffalo Wild Wings (Nasdaq: BWLD) has hammered home its operating goals: 15% annual unit growth in 2007, 20% sales growth, and 25% earnings growth. The numbers are in for 2007, and the Buffalo came through on each of these promises.

There are now 493 Wild Wings restaurants scattered across the country, 15% on the nose more than at the end of 2006. Year-over-year revenues for the fiscal year improved by 21.3% after adjusting last year's results for an extra week of sales. Earnings per share took a 30% flying leap on the same basis.

It's not all wine and roses, as the company just barely managed to squeeze by the full-year targets after markedly slower results in the fourth quarter. Still, the report was good enough to reclaim over 9% of the recent stock price drop in a flash.

The whole casual-dining sector has not been treated kindly by the stock market since the "r" word warnings started in earnest last summer, and B-Dub is no exception:

Despite fulfilling some ambitious growth goals and reaffirming them for another year of supposedly tough macroeconomic times, B-Dub's stock has been falling. In fact, none of these stocks have beaten the S&P 500's 12% decline over that period.

This stock does not get the love it deserves. To reach a 1.0 forward PEG ratio, assuming that B-Dub just meets its growth targets for the next few years, you'd need a $610 million market cap or about $35 per share. That's a 25% discount to fair value by my reckoning. So back up the truck. The market must come to its senses someday, once the Streetwide pessimism abates.

Fair is, after all, fair.

Further Foolishness:

• Foolish Forecast: Buffalo Wild Wings Flying High
• Girl Power Spices Up Buffalo Wild Wings
• And the Best Stock for 2008 Is ...