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El Pollo LoCo (LOCO)
NASDAQ:LOCO
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El Pollo LoCo
(NASDAQ:LOCO)
Rating:60Neutral
Price Target:―
Positive Factors
Brand Relaunch
Management reiterated that FY25 is a year of meaningful culinary innovation which will be amplified by the upcoming May brand relaunch that focuses on repositioning the brand around food that is craveable, affordable, and better for you.
Culinary Innovation
CEO Liz Williams characterized FY25 as a year of tremendous culinary innovation, focusing on brand repositioning around food that is craveable, affordable, and better for you.
Franchise Interest
There is an acceleration in interest from the franchising community in the El Pollo Loco concept, driven by improvements in the operating model and lower build costs.
Negative Factors
Geographic Risks
Risks include geographic concentration in L.A., a limited history of growth outside California, high exposure to chicken costs, ongoing pressure from wage inflation, and an intense competitive environment.
Systemwide Comps Decline
Systemwide comps declined 0.6%, below consensus of +0.3%.
Underwhelming Results
Management characterized 1Q25 results as 'underwhelming' vs. internal plan.
El Pollo LoCo (LOCO) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$274.38M
Dividend YieldN/A
Average Volume (3M)237.12K
Price to Earnings (P/E)10.7
Beta (1Y)1.07
Revenue Growth1.22%
EPS Growth6.59%
CountryUS
Employees4,000
SectorConsumer Cyclical
Sector Strength75
IndustryRestaurants
Share Statistics
EPS (TTM)0.19
Shares Outstanding30,052,185
10 Day Avg. Volume197,386
30 Day Avg. Volume237,120
Financial Highlights & Ratios
PEG RatioN/A
Price to Book (P/B)0.99
Price to Sales (P/S)0.00
P/FCF Ratio12.35
Enterprise Value/Market Cap1.93
Enterprise Value/Revenue0.28
Enterprise Value/Gross Profit5.62
Enterprise Value/Ebitda2.33
Forecast
1Y Price Target
$14.50Price Target Upside58.82% Upside
Rating ConsensusHold
Number of Analyst Covering4
El Pollo LoCo Business Overview & Revenue Model
Company DescriptionEl Pollo Loco Holdings, Inc. (NASDAQ: LOCO) is a leading American restaurant chain specializing in flame-grilled chicken and Mexican-inspired cuisine. Founded in 1980 and headquartered in Costa Mesa, California, the company operates and franchises restaurants across the United States, primarily in the Southwestern region. El Pollo Loco is renowned for its signature citrus-marinated, fire-grilled chicken, which is the centerpiece of its diverse menu offerings, including burritos, tacos, and salads.
How the Company Makes MoneyEl Pollo Loco generates revenue primarily through the sale of food and beverages in its company-operated and franchised restaurant locations. The company earns money from company-operated restaurants by selling its menu items directly to customers. In addition, El Pollo Loco collects franchise royalties and fees from its franchised locations, which contribute to its overall revenue streams. The company also benefits from strategic partnerships and marketing initiatives that enhance brand visibility and expand its customer base.
El Pollo LoCo Financial Statement Overview
Summary
El Pollo LoCo demonstrates solid financial health with consistent revenue growth and robust cash flow generation. However, increased debt and declining free cash flow growth pose risks that need monitoring.Income Statement
El Pollo LoCo has shown consistent revenue growth over recent periods, with a slight increase in TTM (Trailing-Twelve-Months) revenue compared to the previous year. The company maintains healthy gross and EBIT margins, indicating effective cost management. However, the net profit margin has slightly decreased, suggesting potential increases in operating expenses or interest costs.75
Positive
Balance Sheet
The balance sheet shows a stable equity base with a reasonable debt-to-equity ratio. Stockholders' equity has been consistent, and the equity ratio indicates a balanced approach to leveraging assets. However, the total debt has increased in TTM, which might pose a risk if not managed well.70
Positive
Cash Flow
El Pollo LoCo's cash flow analysis shows a drop in free cash flow growth in the TTM period, reflecting higher capital expenditures. The operating cash flow to net income ratio remains strong, suggesting effective cash generation relative to profits. However, the decline in free cash flow could impact future liquidity if the trend continues.68
Positive
| Breakdown | |||||
| TTM | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|---|
| Income Statement | Total Revenue | ||||
| 476.03M | 473.01M | 468.66M | 469.96M | 454.36M | 426.09M | Gross Profit |
| 94.27M | 87.80M | 93.37M | 83.70M | 99.27M | 93.67M | EBIT |
| 40.59M | 41.17M | 39.79M | 30.12M | 41.34M | 48.20M | EBITDA |
| 56.23M | 56.91M | 55.09M | 44.51M | 59.92M | 56.24M | Net Income Common Stockholders |
| 25.25M | 25.68M | 25.55M | 20.80M | 29.12M | 24.47M |
| Balance Sheet | Cash, Cash Equivalents and Short-Term Investments | ||||
| 4.32M | 2.48M | 7.29M | 20.49M | 30.05M | 13.22M | Total Assets |
| 590.45M | 592.01M | 592.30M | 597.22M | 613.79M | 605.22M | Total Debt |
| 261.54M | 263.02M | 273.33M | 252.88M | 233.47M | 263.13M | Net Debt |
| 257.22M | 260.54M | 266.04M | 232.39M | 203.42M | 249.91M | Total Liabilities |
| 324.75M | 331.35M | 341.61M | 316.07M | 303.16M | 327.64M | Stockholders Equity |
| 265.70M | 260.67M | 250.70M | 281.15M | 310.62M | 277.58M |
| Cash Flow | Free Cash Flow | ||||
| 22.05M | 27.70M | 19.36M | 18.63M | 35.06M | 33.86M | Operating Cash Flow |
| 40.35M | 46.78M | 40.69M | 38.55M | 52.10M | 40.55M | Investing Cash Flow |
| -18.21M | -18.94M | -13.45M | -18.91M | -12.48M | -6.69M | Financing Cash Flow |
| -26.94M | -32.65M | -40.45M | -29.19M | -22.79M | -28.71M |
El Pollo LoCo Technical Analysis
Negative
9.13
Price Trends
9.68
Negative
10.60
Negative
11.75
Negative
Market Momentum
-0.16
Negative
43.27
Neutral
18.04
Positive
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For LOCO, the sentiment is Negative. The current price of 9.13 is below the 20-day moving average (MA) of 9.22, below the 50-day MA of 9.68, and below the 200-day MA of 11.75, indicating a bearish trend. The MACD of -0.16 indicates Negative momentum. The RSI at 43.27 is Neutral, neither overbought nor oversold. The STOCH value of 18.04 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for LOCO.
El Pollo LoCo Risk Analysis
El Pollo LoCo disclosed 35 risk factors in its most recent earnings report. El Pollo LoCo reported the most risks in the “Finance & Corporate” category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks
El Pollo LoCo Peers Comparison
Overall Rating
UnderperformOutperform
Sector (62)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
76 Outperform | $12.60B | 29.29 | 33.55% | 1.32% | 15.09% | 31.24% | |
68 Neutral | $5.02B | 409.40 | 2.70% | ― | 14.07% | -47.47% | |
66 Neutral | $2.20B | 12.21 | 90.40% | 8.74% | 2.18% | -5.15% | |
62 Neutral | $1.38B | 17.90 | -20.16% | 4.36% | -2.77% | 4.01% | |
62 Neutral | $6.84B | 11.23 | 3.09% | 3.95% | 2.66% | -25.23% | |
60 Neutral | $274.38M | 10.74 | 9.68% | ― | 1.22% | 6.59% | |
50 Neutral | $383.06M | ― | 4.15% | 8.67% | -6.02% | -136.86% |
* Consumer Cyclical Sector Average
Performance Comparison
LOCO
El Pollo LoCo
9.13
-1.33
-12.72%
JACK
Jack In The Box
20.29
-31.46
-60.79%
PZZA
Papa John's International
42.25
-2.93
-6.49%
TXRH
Texas Roadhouse
189.99
20.34
11.99%
WEN
Wendy's
11.44
-4.82
-29.64%
SHAK
Shake Shack
117.62
21.75
22.69%
El Pollo LoCo Earnings Call Summary
Earnings Call Date:May 01, 2025
(Q1-2025)
| % Change Since: -3.18%|
Next Earnings Date:Jul 31, 2025
Earnings Call Sentiment Neutral
The earnings call presented a mixed outlook. Positive developments such as revenue growth, successful menu innovation, and new restaurant openings were offset by challenges like decreased comparable store sales and increased labor costs. Despite the company's efforts to drive growth through innovation and expansion, economic pressures and operational challenges pose significant hurdles.Q1-2025 Updates
Positive Updates
Revenue Growth
Total revenue for Q1 2025 was $119.2 million, compared to $116.2 million in Q1 2024, marking a 2.6% increase.
Menu Innovation Success
The launch of Mango Habanero fire-grilled chicken drove trial among new guests and showcased the potential for flavor and menu innovation.
Franchise Revenue Increase
Franchise revenue increased 16.2% to $13.2 million during the first quarter.
New Restaurant Openings
Two new restaurants were opened in Q1, with plans for at least 10 openings in 2025 and further acceleration in 2026.
Successful Distribution Transition
Seamless transition to a new distribution partner, PFG, supporting improved business models and future growth.
Negative Updates
Decreased Comparable Store Sales
System-wide comparable store sales decreased 1.2% in Q1, with company-operated restaurants down 0.1% and franchise restaurants down 1.8%.
Labor Cost Increase
Labor-related expenses increased 120 basis points year-over-year to 32.7% of company restaurant sales, with wage inflation at 12% in Q1.
Restaurant Contribution Margin Decline
Restaurant contribution margin decreased to 16% from 17.6% in the previous year due to labor cost increases and other operational expenses.
Consumer Pullback
A noticeable decline in consumer spending, attributed to economic uncertainty and macroeconomic pressures, particularly affecting the Hispanic consumer.
Company Guidance
During the El Pollo Loco First Quarter 2025 Earnings Conference Call, guidance for the fiscal year 2025 was provided, highlighting several key metrics and strategic initiatives. The company expects full-year restaurant contribution margins to range between 17.25% and 17.75%, despite a lower-than-expected first quarter margin of 16%. They plan to open 10 to 11 new system-wide restaurants, with the majority being franchise locations, and remodel 60 to 70 restaurants. Capital expenditures are anticipated to be between $30 million and $34 million, while general and administrative expenses are projected to be in the range of $48 million to $51 million. The effective income tax rate is expected to be between 29% and 29.5%. Menu innovation, including the launch of Mango Habanero chicken and upcoming products like fresco wraps and quesadillas, is central to their growth strategy. They are responding to headwinds such as consumer pullback and weather impacts, with plans to enhance operational efficiencies and address service quality issues. The company remains optimistic about long-term growth, driven by brand relaunch initiatives and menu innovations.El Pollo LoCo Corporate Events
Executive/Board ChangesBusiness Operations and Strategy
El Pollo Loco Expands Board with Joe Taylor Appointment
Positive
Jan 13, 2025
El Pollo Loco announced the appointment of Joe Taylor to its Board of Directors, filling a vacancy and expanding the board to eight members. Taylor’s extensive experience in restaurant finance and leadership, particularly from his tenure at Brinker International, is expected to support El Pollo Loco’s growth strategy and enhance its market position in the restaurant industry.
Glossary
OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.
NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.
UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.