El Pollo LoCo (LOCO) AI Stock Analysis

• Market Cap: $423.88M
• Dividend Yield: N/A
• Average Volume (3M): 242.50K
• Price to Earnings (P/E): 11.7
• Beta (1Y): 0.98
• Revenue Growth: 2.09%
• EPS Growth: 12.10%
• Country: US
• Employees: 4,000
• Sector: Consumer Cyclical
• Sector Strength: 84
• Industry: Restaurants
• EPS (TTM): 0.25
• Shares Outstanding: 29,956,259
• 10 Day Avg. Volume: 278,012
• 30 Day Avg. Volume: 242,502
• PEG Ratio: 1.99
• Price to Book (P/B): 1.05
• Price to Sales (P/S): 0.62
• P/FCF Ratio: -39.48
• Enterprise Value/Market Cap: 1.55
• Enterprise Value/Revenue: 1.34
• Enterprise Value/Gross Profit: 4.68
• Enterprise Value/Ebitda: 11.25
• 1Y Price Target: $13.97
• Price Target Upside: -1.27% Downside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 4
• EPS Forecast (FY): 0.97
• Revenue Forecast (FY): $498.53M

• Rating: 62 Neutral
• Price Target: $14.00 ▼(-1.06% Downside)
• Action: Reiterated Date: 03/17/26
• Date: Action: Reiterated 03/17/26

The score is primarily constrained by the sharp 2025 cash flow deterioration (negative operating and free cash flow) despite positive earnings, partially offset by improved leverage and steady profitability. Guidance and operational momentum are constructive, and valuation is modest, but technicals show an extended move (overbought signals) that raises near-term risk.

Positive Factors

Stronger leverage and balance sheet

Material debt reduction and a low debt-to-equity ratio materially lower financial risk and increase strategic optionality. A stronger capital structure supports continued franchise and remodel investment, reduces refinancing pressure, and gives management flexibility to fund growth without excessive interest burden.

Scaled digital & loyalty engagement

Sustained growth in loyalty and digital channels builds recurring customer relationships and lowers acquisition costs over time. Owned digital sales increase frequency and margin capture versus third-party platforms, supporting sustainable comparable sales and higher lifetime value across a multi-year period.

Improved new-unit economics and pipeline

Higher-performing new units and lower build costs for second-generation sites improve return on invested capital and accelerate profitable system growth. A scalable franchise pipeline and realistic unit economics support multi-year unit expansion and incremental EBITDA as remodels and new openings compound sales.

Negative Factors

Negative operating and free cash flow

A sharp reversal in cash conversion undermines ability to self-fund capex, remodels, and expansion; it also weakens resilience to cost shocks. Persistent negative cash flow would force external financing or slower growth, making multi-year targets and shareholder returns harder to achieve.

Margin compression and rising costs

Material gross and operating margin erosion reduces free cash generation and weakens unit economics. If commodity, wage, occupancy and G&A trends persist, margin recovery will require sustained pricing, productivity gains, or mix shifts; failure risks slower EBITDA growth and constrained reinvestment.

Traffic declines offset by higher checks

Falling transactions indicate weaker visit frequency and demand elasticity; relying on higher average checks to sustain sales risks customer attrition and limits long-term comp growth. Persistent traffic weakness undermines franchise economics and the durability of systemwide sales gains.

El Pollo LoCo Business Overview & Revenue Model

Company Description

El Pollo Loco Holdings, Inc., through its subsidiary, El Pollo Loco, Inc., develops, franchises, licenses, and operates quick-service restaurants under the El Pollo Loco name. As of May 04, 2022, the company operated 480 restaurants comprising 189 company-operated and 291 franchised restaurants located in California, Nevada, Arizona, Texas, Utah, and Louisiana. It also licenses one restaurant in the Philippines. The company was formerly known as Chicken Acquisition Corp. and changed its name to El Pollo Loco Holdings, Inc. in April 2014. El Pollo Loco Holdings, Inc. was founded in 1975 and is headquartered in Costa Mesa, California.

How the Company Makes Money

The company makes money primarily from (1) sales at company-operated restaurants and (2) revenue derived from franchised and licensed restaurants. For company-operated locations, revenue is generated from direct-to-consumer food and beverage sales across on-premise and off-premise occasions (e.g., drive-thru, takeout, delivery, and digital/app orders). For franchised and licensed locations, revenue is generated through ongoing royalties based on restaurant sales and other contract-related fees (e.g., initial franchise fees or similar charges) where applicable; these arrangements allow the company to earn income without bearing the full operating costs of those restaurants. Key factors that influence earnings include restaurant traffic and average check, menu pricing, product mix (including higher-margin items and add-ons), operational efficiency and labor costs, food and commodity costs (especially chicken and other inputs), the performance and expansion of the franchise base, and the effectiveness of marketing and loyalty/digital programs that drive frequency and off-premise sales. Specific material partnerships and their financial contribution: null.

El Pollo LoCo Financial Statement Overview

Summary

Profitability is steady for the business (net margin ~5% and EBITDA margin ~10%–12%), and 2025 leverage improved materially with debt reduced to ~$51M and debt-to-equity ~0.18. However, 2025 operating cash flow and free cash flow turned negative (about -$9.4M OCF and -$7.8M FCF), a major earnings-quality and near-term flexibility concern that outweighs the balance sheet improvement.

Income Statement

LOCO shows steady but low growth, with revenue up ~2% in 2025 (annual) after a mostly flat 2023–2024. Profitability is solid and consistent for a restaurant business, with net margins holding around ~5% across 2022–2025 and EBITDA margins ~10%–12%. The key weakness is margin compression in 2025 versus 2024 (gross margin fell from ~21.9% to ~17.2%, and EBIT margin also stepped down), which signals higher costs and less pricing leverage despite slightly higher revenue.

Balance Sheet

The balance sheet improved materially in 2025 (annual), with debt dropping to ~$51M and debt-to-equity improving to ~0.18 from ~1.0+ in 2023–2024, reducing financial risk. Equity is sizable (~$291M) and return on equity is steady around ~9%–10% in recent years, indicating consistent profitability on the capital base. The main drawback is that leverage was elevated as recently as 2023–2024, and the sharp year-over-year change suggests the capital structure may be less stable than it appears from a single period.

Cash Flow

Cash generation weakened sharply in 2025 (annual): operating cash flow turned negative (~-$9.4M) and free cash flow also went negative (~-$7.8M) after several years of positive operating and free cash flow (e.g., ~$46.8M operating and ~$27.7M free cash flow in 2024). This break in cash conversion is a major red flag because earnings remained positive while cash flow did not, implying working-capital or other cash headwinds. The strength is that 2020–2024 cash flow was consistently positive and often meaningful versus net income, but the 2025 reversal dominates near-term quality.

Breakdown	Dec 2025	Dec 2024	Dec 2023	Dec 2022	Dec 2021
Income Statement
Total Revenue	490.05M	473.01M	468.66M	469.96M	454.36M
Gross Profit	140.35M	103.52M	93.37M	83.70M	99.27M
EBITDA	58.42M	56.91M	55.09M	44.97M	56.45M
Net Income	26.49M	25.68M	25.55M	20.80M	29.12M
Balance Sheet
Total Assets	606.65M	592.01M	592.30M	597.22M	613.79M
Cash, Cash Equivalents and Short-Term Investments	6.23M	2.48M	7.29M	20.49M	30.05M
Total Debt	239.57M	263.02M	273.33M	252.88M	233.47M
Total Liabilities	315.57M	331.35M	341.61M	316.07M	303.16M
Stockholders Equity	291.08M	260.67M	250.70M	281.15M	310.62M
Cash Flow
Free Cash Flow	-7.75M	27.70M	19.36M	18.63M	35.06M
Operating Cash Flow	-9.40M	46.78M	40.69M	38.55M	52.10M
Investing Cash Flow	-22.64M	-18.94M	-13.45M	-18.91M	-12.48M
Financing Cash Flow	-21.70M	-32.65M	-40.45M	-29.19M	-22.79M

El Pollo LoCo Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 14.15
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Negative
• RSI: Negative
• STOCH: Negative

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For LOCO, the sentiment is Positive. The current price of 14.15 is above the 20-day moving average (MA) of 11.82, above the 50-day MA of 11.18, and above the 200-day MA of 10.64, indicating a bullish trend. The MACD of 0.83 indicates Negative momentum. The RSI at 80.72 is Negative, neither overbought nor oversold. The STOCH value of 90.28 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for LOCO.

El Pollo LoCo Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
CAKE	69 Neutral	$2.85B	15.71	37.06%	2.11%	4.90%	27.14%
LOCO	62 Neutral	$423.88M	11.70	9.51%	―	2.09%	12.10%
Sector *	61 Neutral	$18.38B	12.79	-2.54%	3.03%	1.52%	-15.83%
WEN	57 Neutral	$1.35B	9.79	140.58%	8.15%	-0.21%	0.16%
JACK	49 Neutral	$209.40M	2.44	7.30%	9.34%	-6.75%	-118.94%
PZZA	48 Neutral	$1.13B	42.31	-6.99%	4.72%	-0.64%	-60.71%

El Pollo LoCo Corporate Events

El Pollo Loco appoints new independent board director

On January 27, 2026, El Pollo Loco announced that longtime board member Mark Buller would retire from its Board of Directors effective February 28, 2026, after a decade of service, with the company emphasizing that his departure was not due to any disagreement and crediting him with helping improve restaurant operations. To fill the resulting vacancy and support its national expansion strategy, the board, on the same date and effective March 1, 2026, appointed Domino’s Pizza Executive Vice President and Chief Restaurant Officer Frank Garrido as an independent director and member of the Compensation and Nominating and Governance committees, bringing extensive franchise, operations, and technology experience from major restaurant brands that is expected to strengthen El Pollo Loco’s operational leadership and focus on maximizing shareholder value.

The most recent analyst rating on (LOCO) stock is a Buy with a $12.50 price target. To see the full list of analyst forecasts on El Pollo LoCo stock, see the LOCO Stock Forecast page.