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El Pollo LoCo Holdings (LOCO)
:LOCO
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El Pollo LoCo
(NASDAQ:LOCO)
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Select Model
Rating:74Outperform
Price Target:
$11.50
▲(9.84% Upside)
El Pollo Loco's strong revenue growth and improved leverage are significant positives, supported by attractive valuation and positive earnings call insights. However, challenges in net profit margins, cash conversion efficiency, and increased operating expenses slightly temper the overall outlook.
Positive Factors
Digital Business Growth
The growth in digital sales indicates a successful adaptation to consumer preferences, enhancing customer engagement and potentially increasing sales efficiency.
Franchise Revenue Increase
The increase in franchise revenue reflects successful expansion and adoption of new systems, contributing to a stable and diversified income stream.
Restaurant Contribution Margin Improvement
Improved margins suggest operational efficiency and cost management, which can lead to sustained profitability in a competitive industry.
Negative Factors
Volatile Revenue Growth
Inconsistent revenue growth and declining cash flow can hinder long-term planning and investment, affecting the company's growth trajectory.
Decrease in Company-Operated Restaurant Revenue
A decrease in revenue from company-operated restaurants indicates potential challenges in maintaining customer traffic and sales volume.
Increased Operating Expenses
Rising operating expenses, including G&A costs, can pressure margins and reduce profitability if not managed effectively.
El Pollo LoCo (LOCO) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$313.63M
Dividend YieldN/A
Average Volume (3M)316.10K
Price to Earnings (P/E)11.9
Beta (1Y)1.06
Revenue Growth2.09%
EPS Growth12.10%
CountryUS
Employees4,000
SectorConsumer Cyclical
Sector Strength84
IndustryRestaurants
Share Statistics
EPS (TTM)0.27
Shares Outstanding29,954,935
10 Day Avg. Volume221,539
30 Day Avg. Volume316,097
Financial Highlights & Ratios
PEG Ratio0.94
Price to Book (P/B)1.35
Price to Sales (P/S)0.75
P/FCF Ratio12.73
Enterprise Value/Market Cap1.71
Enterprise Value/Revenue1.12
Enterprise Value/Gross Profit4.94
Enterprise Value/Ebitda9.49
Forecast
1Y Price Target
$13.67Price Target Upside30.56% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering4
EPS Forecast (FY)0.94
Revenue Forecast (FY)$492.13M
El Pollo LoCo Business Overview & Revenue Model
Company DescriptionEl 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 MoneyEl Pollo Loco generates revenue primarily through the sale of its food and beverage offerings at its company-owned and franchised locations. The company employs a dual revenue model consisting of company-operated restaurants and franchise operations, with a significant portion of earnings coming from franchise fees and royalties. Revenue streams include direct sales from in-store dining, takeout, and drive-thru services, as well as catering services for events. Additionally, seasonal promotions, limited-time offerings, and loyalty programs encourage repeat business and customer engagement, contributing further to its earnings. Partnerships with delivery services also enhance accessibility and sales volume.
El Pollo LoCo Earnings Call Summary
Earnings Call Date:Oct 30, 2025
(Q3-2025)
| % Change Since: |
Next Earnings Date:Mar 05, 2026
Earnings Call Sentiment Positive
The earnings call highlighted strong growth in digital sales and traffic, margin improvements, and successful new restaurant openings. However, there were challenges with a slight decrease in company-operated restaurant revenue and increased operating expenses.Q3-2025 Updates
Positive Updates
Positive System-Wide Traffic Growth
The company reported positive system-wide traffic growth during the third quarter, driven by targeted innovation and value offerings, such as $9.99 quesadilla combos and app-only promotions.
Restaurant Contribution Margin Improvement
Restaurant contribution margin improved to 18.3% in the third quarter from 16.7% in the year-ago period, driven by cost savings and enhanced labor productivity.
Digital Business Growth
Digital business, including kiosks, grew to 27% of system sales compared to 20% in the same period last year, with loyalty transactions up 28% year-over-year.
Franchise Revenue Increase
Franchise revenue increased 13.5% during the third quarter, driven by the rollout of a new point-of-sale system and the opening of new franchise-operated restaurants.
Successful New Restaurant Openings
El Pollo Loco opened its 500th restaurant and reported that new openings are averaging $2 million in annualized sales, demonstrating strong unit growth.
Negative Updates
Decrease in Company-Operated Restaurant Revenue
Company-operated restaurant revenue decreased 0.5% to $100.7 million, with a 1.1% decrease in comparable restaurant sales, driven by a 1.3% decrease in average check size.
Higher Third-Party Delivery Costs
Occupancy and other operating expenses increased due to higher third-party delivery-related expenses and software maintenance fees.
G&A Expenses Increase
General and administrative expenses increased to $12.3 million, driven by stock compensation, legal and professional fees, and costs related to a new ERP system and office relocation.
Company Guidance
During the El Pollo Loco Third Quarter 2025 Earnings Conference Call, several key metrics and guidance were discussed. The company reported total revenue of $121.5 million, with a slight decrease in company-operated restaurant revenue to $100.7 million. Franchise revenue increased by 13.5% to $12.9 million, driven by IT pass-through revenue and new franchise openings. The restaurant contribution margin improved to 18.3%, with a full-year expectation of 17.5% to 17.75%. System-wide comparable store sales for the fourth quarter to date increased by 2.2%. The company successfully opened its 500th restaurant and plans to open at least 10 new restaurants in 2025. Capital spending is projected to be between $28 million to $30 million, with G&A expenses of $47.5 million to $49.5 million. The effective income tax rate is estimated at 29% to 29.25%. The company continues to focus on menu innovation, digital growth, and operational excellence to drive sustainable growth and profitability.El Pollo LoCo Financial Statement Overview
Summary
El Pollo Loco demonstrates a stable financial position with consistent profitability and efficient operations. Healthy margins are offset by volatile revenue growth and declining free cash flow growth. The balance sheet is solid, but reducing debt could enhance financial stability.Income Statement
El Pollo LoCo's income statement shows a stable performance with a consistent gross profit margin around 20% and a net profit margin above 5% in TTM. However, the revenue growth rate has been volatile, with a significant drop in TTM compared to the previous year. EBIT and EBITDA margins remain healthy, indicating efficient operations despite the competitive restaurant industry.78
Positive
Balance Sheet
The balance sheet reflects a moderate debt-to-equity ratio, which has slightly improved in TTM, indicating a balanced approach to leveraging. Return on equity is stable, suggesting effective use of equity to generate profits. The equity ratio is reasonable, showing a solid asset base, although there is room for improvement in reducing debt levels.72
Positive
Cash Flow
Cash flow analysis reveals a decline in free cash flow growth in TTM, which could be a concern if it continues. The operating cash flow to net income ratio is below 1, indicating less cash generation relative to net income. However, the free cash flow to net income ratio remains above 0.5, suggesting some level of cash profitability.65
Positive
| Breakdown | TTM | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|---|---|
Income Statement | ||||||
| Total Revenue | 480.81M | 473.01M | 468.66M | 469.96M | 454.36M | 426.09M |
| Gross Profit | 108.63M | 103.52M | 93.37M | 83.70M | 99.27M | 93.67M |
| EBITDA | 56.54M | 56.91M | 55.09M | 44.97M | 56.45M | 50.30M |
| Net Income | 25.90M | 25.68M | 25.55M | 20.80M | 29.12M | 24.47M |
Balance Sheet | ||||||
| Total Assets | 602.75M | 592.01M | 592.30M | 597.22M | 613.79M | 605.22M |
| Cash, Cash Equivalents and Short-Term Investments | 10.87M | 2.48M | 7.29M | 20.49M | 30.05M | 13.22M |
| Total Debt | 191.34M | 263.02M | 273.33M | 252.88M | 233.47M | 263.13M |
| Total Liabilities | 319.82M | 331.35M | 341.61M | 316.07M | 303.16M | 327.64M |
| Stockholders Equity | 282.93M | 260.67M | 250.70M | 281.15M | 310.62M | 277.58M |
Cash Flow | ||||||
| Free Cash Flow | 21.49M | 27.70M | 19.36M | 18.63M | 35.06M | 33.86M |
| Operating Cash Flow | 39.80M | 46.78M | 40.69M | 38.55M | 52.10M | 40.55M |
| Investing Cash Flow | -18.31M | -18.94M | -13.45M | -18.91M | -12.48M | -6.69M |
| Financing Cash Flow | -18.51M | -32.65M | -40.45M | -29.19M | -22.79M | -28.71M |
El Pollo LoCo Technical Analysis
Positive
10.47
Price Trends
9.88
Positive
10.23
Positive
10.30
Positive
Market Momentum
0.15
Positive
55.43
Neutral
25.43
Neutral
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 10.47 is above the 20-day moving average (MA) of 10.26, above the 50-day MA of 9.88, and above the 200-day MA of 10.30, indicating a bullish trend. The MACD of 0.15 indicates Positive momentum. The RSI at 55.43 is Neutral, neither overbought nor oversold. The STOCH value of 25.43 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive 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
UnderperformOutperform
Sector (61)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
74 Outperform | $313.63M | 11.87 | 9.63% | ― | 2.09% | 12.10% | |
68 Neutral | ― | ― | 19.65% | ― | -1.72% | -70.31% | |
67 Neutral | $2.26B | 13.79 | 39.14% | 2.38% | 4.90% | 27.14% | |
61 Neutral | $18.38B | 12.79 | -2.54% | 3.03% | 1.52% | -15.83% | |
60 Neutral | $1.58B | 8.79 | 100.85% | 8.70% | -0.21% | 0.16% | |
56 Neutral | $1.32B | 35.50 | ― | 4.57% | -0.64% | -60.71% | |
47 Neutral | $317.66M | ― | ― | 10.47% | -6.75% | -118.94% |
* Consumer Cyclical Sector Average
LOCO
El Pollo LoCo
10.47
-2.29
-17.95%
JACK
Jack In The Box
16.81
-30.04
-64.12%
PZZA
Papa John's International
40.25
-8.12
-16.79%
CAKE
Cheesecake Factory
45.40
-2.38
-4.98%
WEN
Wendy's
8.29
-9.28
-52.82%
PBPB
Potbelly
17.12
6.91
67.68%
El Pollo LoCo Corporate Events
El Pollo Loco’s Earnings Call: Growth Amid Challenges
Nov 1, 2025
The recent earnings call for El Pollo Loco Holdings revealed a generally positive sentiment, with notable achievements in digital sales growth, improved margins, and successful new restaurant openings. However, the company faced challenges such as a slight dip in revenue from company-operated restaurants and rising operating expenses.
El Pollo Loco Reports Q3 2025 Financial Results
Oct 31, 2025
El Pollo Loco Holdings, Inc., a leading fire-grilled chicken restaurant chain, operates over 495 locations across the United States and internationally. The company recently reported its third-quarter 2025 financial results, highlighting a slight increase in total revenue to $121.5 million compared to the previous year. Despite a 0.8% decrease in system-wide comparable restaurant sales, the company achieved a net income of $7.4 million, up from $6.2 million in the same period last year. Key performance metrics included an increase in income from operations to $11.5 million and a rise in adjusted EBITDA to $17.4 million. The company also reported a restaurant contribution margin improvement to 18.3%. Looking ahead, El Pollo Loco plans to continue its expansion with the opening of at least ten new restaurants by the end of 2025, while maintaining a focus on operational excellence and strategic growth initiatives.
Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
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.