Winmark, the franchisor behind Plato's Closet and Once Upon A Child, has seen its stock rise just 3% over the past year to around $388.10 as of July 17, 2026, even as second-quarter royalties grew 7.8% to $20.1 million. The company, which operates an asset-light model with a 98% franchise renewal rate and roughly 90% of revenue from recurring royalty fees, reported first-half revenue of $42.8 million, up from $42.3 million a year earlier, but earnings per share slipped to $2.81 from $2.89. The Motley Fool's Hidden Gems Superscore assigns Winmark a 78 out of 100, placing it in the Strong category, reflecting its durable competitive moat and high capital efficiency, though the score is capped by a trailing price-to-earnings ratio of about 35 and a mature, low-growth profile. Management completed the wind-down of its equipment leasing business in 2025, leaving a pure-play franchisor, but SG&A expenses rose 14% year-over-year due to compensation costs and a one-time software license expense. The dividend, currently $1.02 per quarter, is expected to keep climbing, but the stock may continue to lag as its multiple adjusts to the business's modest growth trajectory.
Winmark CorporationHigh P/E ratio (~35) and modest growth trajectory weigh on stock, with EPS slipping and SG&A rising.