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1. Company Snapshot

1.a. Company Description

Texas Roadhouse, Inc., together with its subsidiaries, operates casual dining restaurants in the United States and internationally.The company operates and franchises restaurants under the Texas Roadhouse, Bubba's 33, and Jaggers names.As of December 28, 2021, it operated 566 domestic restaurants and 101 franchise restaurants.


Texas Roadhouse, Inc.was founded in 1993 and is based in Louisville, Kentucky.

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1.b. Last Insights on TXRH

Texas Roadhouse's recent performance was negatively impacted by a Q2 earnings miss, with EPS of $1.86 per share, falling short of the Zacks Consensus Estimate of $1.95 per share. The company's comparable sales growth is slowing to historical levels, and margins are under pressure from cost inflation. Additionally, the departure of its CFO, Chris Monroe, may have contributed to investor uncertainty. Valuation concerns are also raised, with an elevated 28x forward earnings multiple. (Source: Texas Roadhouse: Coming Back Down To Earth)

1.c. Company Highlights

2. Texas Roadhouse Delivers Mixed Results

Texas Roadhouse reported revenue growth of 3.1% in the fourth quarter, driven by a 4% increase in average weekly sales, resulting in total revenue of nearly $5.9 billion for 2025. However, restaurant margin dollars decreased by 15.6% to $205 million, and diluted earnings per share (EPS) declined by 26.1% to $1.28, missing analyst estimates of $1.53. The company's same-store sales growth was 4.2%, driven by 1.9% traffic growth and a 2.3% increase in average check.

Publication Date: Feb -22

📋 Highlights
  • Revenue Growth:: 2025 revenue reached nearly $5.9 billion, driven by 3.1% Q4 revenue growth and 4.9% annual same-store sales increase.
  • Restaurant Margin Performance:: Generated second-highest restaurant margin dollars, despite a 15.6% Q4 decline to $205 million due to cost pressures.
  • Dividend Increase:: Quarterly dividend raised by 10% to $0.75 per share, reflecting confidence in financial stability.
  • Commodity Inflation Guidance:: 7% inflation expected in 2026, with beef inflation as the primary driver, impacting cost management strategies.
  • Capital Allocation:: Maintained $400 million capex guidance for 2026, prioritizing new restaurant development and infrastructure upgrades.

Operational Highlights

The company achieved several operational milestones, including opening its 800th system-wide restaurant and completing the rollout of digital kitchen and upgraded guest management systems. According to Jerry Morgan, "We're committed to legendary food and legendary service, with a focus on high-level hospitality and value." The digital kitchen has led to a calmer kitchen experience and allowed for more to-go business.

Guidance and Outlook

Texas Roadhouse expects commodity inflation of approximately 7% for 2026, with beef inflation accounting for nearly all of the expected commodity inflation. The company will maintain its pricing strategy, with 3.1% pricing in the first quarter, followed by 3.6% in the second and third quarters. Michael Bailen noted that the company is "more locked in on fixed prices for the first half of the year (65%) compared to the back half (25%)."

Valuation Metrics

With a P/E Ratio of 29.14 and an EV/EBITDA of 19.22, the market is pricing in a certain level of growth for Texas Roadhouse. Analysts estimate next year's revenue growth at 9.3%. The company's Dividend Yield is 1.52%, and the Free Cash Flow Yield is 6.14%, indicating a relatively attractive return profile. The ROIC of 19.97% and ROE of 28.2% demonstrate the company's ability to generate strong returns on capital.

Future Prospects

The company is optimistic about its growth prospects, with plans to continue investing in new restaurant development and maintaining the condition of existing locations. Gerald Morgan expressed confidence in the performance and growth potential of Bubba's, stating that it will "reach around 10 locations this year and continue to add value to the company." The company's focus on innovative ideas, such as adding smother or sidekicks to menu items, is expected to drive future growth.

3. NewsRoom

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Wealth Enhancement Advisory Services LLC Boosts Stock Holdings in Texas Roadhouse, Inc. $TXRH

Mar -30

Source: defenseworld.net

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Texas Roadhouse, Inc. $TXRH Shares Sold by Aquatic Capital Management LLC

Mar -16

Source: defenseworld.net

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Texas Roadhouse, Inc. (NASDAQ:TXRH) Given Consensus Recommendation of “Moderate Buy” by Analysts

Mar -14

Source: defenseworld.net

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Capital International Inc. CA Purchases Shares of 20,154 Texas Roadhouse, Inc. $TXRH

Mar -12

Source: defenseworld.net

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Capital World Investors Has $371.66 Million Stock Position in Texas Roadhouse, Inc. $TXRH

Mar -12

Source: defenseworld.net

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Going All In on Steak Made Texas Roadhouse No. 1 in Casual Dining

Mar -06

Source: wsj.com

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Texas Roadhouse, Inc. Appoints Lisa Ingram to Board of Directors

Mar -05

Source: globenewswire.com

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Artisan Global Discovery Fund Q4 2025 Winners, Laggards, Buys & Sells

Feb -26

Source: seekingalpha.com

4. Business Breakdown

4.a. Revenues by Country

4.b. Revenues by Segment

5. Expected revenues mid-term growth (8.92%)

6. Segments

Texas Roadhouse

Expected Growth: 9%

Texas Roadhouse's 9% growth is driven by increasing same-store sales, expansion into new markets, and effective marketing strategies. The company's focus on providing high-quality food at affordable prices, combined with its unique dining experience, has led to increased customer loyalty and retention. Additionally, its strong brand reputation and efficient operations have enabled the company to maintain profitability while expanding its footprint.

Bubba's 33

Expected Growth: 8%

Bubba's 33, a fast-casual concept from Texas Roadhouse, Inc., achieves 8% growth driven by increasing brand awareness, strategic location expansion, and a loyal customer base. Menu innovation, digital marketing, and operational efficiency also contribute to its success. Additionally, the brand's focus on sports and entertainment, as well as its unique atmosphere, attract a wide range of customers, further fueling growth.

Reconciling Items

Expected Growth: 7%

Texas Roadhouse, Inc.'s 7% growth is driven by increasing same-store sales, expansion of restaurant count, and rising average unit volume. Additionally, effective menu pricing, improved labor productivity, and strategic marketing initiatives contribute to the growth. Furthermore, the company's focus on digital transformation, including online ordering and mobile apps, enhances the customer experience and drives sales.

Other

Expected Growth: 6%

Texas Roadhouse's 6% growth is driven by increasing same-store sales, successful menu price increases, and expansion of its restaurant count. Additionally, the company's focus on improving operational efficiency, investing in digital capabilities, and enhancing the customer experience through remodels and technology upgrades also contribute to its growth momentum.

7. Detailed Products

Hand-Cut Steaks

Texas Roadhouse offers a variety of hand-cut steaks, including Ribeye, Sirloin, and Filet Mignon, all made to order and cooked to perfection.

Fall-Off-The-Bone Ribs

Our ribs are slow-cooked to fall-off-the-bone tenderness and slathered in our signature BBQ sauce.

Made-From-Scratch Sides

Our sides are made from scratch in-house every day, including our famous mashed potatoes, green beans, and sweet potatoes.

Fresh Salads

Our fresh salads are made with crisp lettuce, fresh vegetables, and topped with your choice of protein.

Homemade Biscuits

Our famous homemade biscuits are baked fresh in-house every day and served with a side of honey butter.

Lunch Specials

Our lunch specials include a variety of options, including sandwiches, salads, and entrees, all at an affordable price.

8. Texas Roadhouse, Inc.'s Porter Forces

Forces Ranking

Threat Of Substitutes

Texas Roadhouse, Inc. faces moderate threat from substitutes, as customers have various dining options, including cooking at home, ordering takeout, or visiting other restaurants. However, the company's unique menu offerings and affordable prices help mitigate this threat.

Bargaining Power Of Customers

Customers have limited bargaining power due to Texas Roadhouse, Inc.'s strong brand reputation and loyal customer base. The company's focus on quality, value, and customer service helps maintain customer loyalty and reduces the threat of customer bargaining power.

Bargaining Power Of Suppliers

Suppliers have moderate bargaining power due to the company's dependence on a few key suppliers for ingredients and materials. However, Texas Roadhouse, Inc.'s large scale of operations and long-term contracts help mitigate this threat.

Threat Of New Entrants

The threat of new entrants is low due to the high barriers to entry in the casual dining industry, including significant capital requirements, regulatory hurdles, and the need for a strong brand reputation. Texas Roadhouse, Inc.'s established brand and scale of operations provide a competitive advantage.

Intensity Of Rivalry

The casual dining industry is highly competitive, with many established players and a high level of rivalry. Texas Roadhouse, Inc. faces intense competition from other casual dining chains, which can lead to pricing pressure and marketing expenses.

9. SWOT Analysis

Strength

Weaknesses

Opportunities

Threats

10. Capital Structure

10.a. Balance Sheet

10.b. Weighted Average Cost of capital

Value
Debt Weight 40.31%
Debt Cost 3.95%
Equity Weight 59.69%
Equity Cost 8.97%
WACC 6.94%
Leverage 67.52%

11. Quality Control: Texas Roadhouse, Inc. passed 4 out of 9 key points

12.a Historical Valuation

12.b Price/Earnings Ratio

12.c Margin Valuation

12.d Peers Valuation

Peers Group Analysis

Stock-Card
Darden

A-Score: 6.1/10

Value: 4.0

Growth: 6.0

Quality: 5.4

Yield: 6.0

Momentum: 6.0

Volatility: 9.0

1-Year Total Return ->

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Stock-Card
Wendy's

A-Score: 5.6/10

Value: 6.3

Growth: 5.9

Quality: 4.8

Yield: 9.0

Momentum: 0.0

Volatility: 7.3

1-Year Total Return ->

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Stock-Card
Texas Roadhouse

A-Score: 5.4/10

Value: 2.6

Growth: 8.2

Quality: 5.5

Yield: 4.0

Momentum: 4.0

Volatility: 8.3

1-Year Total Return ->

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Stock-Card
Domino's Pizza

A-Score: 5.4/10

Value: 4.2

Growth: 6.4

Quality: 6.0

Yield: 3.0

Momentum: 4.0

Volatility: 8.7

1-Year Total Return ->

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Stock-Card
Brinker

A-Score: 4.7/10

Value: 4.7

Growth: 8.0

Quality: 5.4

Yield: 0.0

Momentum: 6.0

Volatility: 4.0

1-Year Total Return ->

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Stock-Card
Wingstop

A-Score: 4.4/10

Value: 2.5

Growth: 9.4

Quality: 6.9

Yield: 1.0

Momentum: 3.0

Volatility: 3.3

1-Year Total Return ->

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Peers Metrics

12.e Scoring Insights

12.f DCF BETA

Parameters

Short Term Growth

Short term Time

Long-Term Growth

WACC

Target Price

162.98$

Current Price

162.98$

Potential

-0.00%

Expected Cash-Flows