Portillo's (PTLO) AI Stock Analysis

• Market Cap: $508.60M
• Dividend Yield: N/A
• Average Volume (3M): 3.84M
• Price to Earnings (P/E): 14.9
• Beta (1Y): 0.98
• Revenue Growth: 3.62%
• EPS Growth: 17.67%
• Country: US
• Employees: 8,512
• Sector: Consumer Cyclical
• Sector Strength: 83
• Industry: Restaurants
• EPS (TTM): 0.12
• Shares Outstanding: 71,905,580
• 10 Day Avg. Volume: 3,222,559
• 30 Day Avg. Volume: 3,837,431
• PEG Ratio: 0.46
• Price to Book (P/B): 1.39
• Price to Sales (P/S): 0.78
• P/FCF Ratio: 56.41
• Enterprise Value/Market Cap: 2.85
• Enterprise Value/Revenue: 2.01
• Enterprise Value/Gross Profit: 4.70
• Enterprise Value/Ebitda: 15.45
• 1Y Price Target: $11.14
• Price Target Upside: 65.04% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 8

• Rating: 67 Neutral
• Price Target: $7.50 ▲(11.11% Upside)

Portillo's overall stock score reflects strong financial performance and positive corporate events. However, bearish technical indicators and moderate valuation weigh on the score. The company's strategic initiatives and leadership changes are promising, but market challenges and inflationary pressures need to be addressed.

Positive Factors

Drive-thru Efficiency

Portillo’s has continued to make progress on speeding up drive-thru times, which currently stand at about 5 minutes 30 seconds following a renewed emphasis on employee training and optimized staffing.

Kiosk Implementation

Kiosks have bolstered comps since being fully deployed, with adoption rates approaching 30% of walk-in traffic and a 15% lift in average ticket.

Loyalty Program

Portillo’s new app-less loyalty program is expected to drive improved frequency following a shift to more targeted text-based offers.

Negative Factors

Cost Pressures

Restaurant-level margin contracted a greater-than-expected 110 basis points to 20.8% on higher commodity and labor costs.

Location Performance

Locations in Texas are lagging expectations, with continued underperformance in Houston and rapid densification of Dallas translating to lower average unit volumes.

Revenue Growth

Portillo’s second-quarter revenue growth of 4% was below expectations for a 7% to 8% increase, with weaker-than-expected new unit productivity accounting for roughly two-thirds of the sales shortfall.

Portillo's Business Overview & Revenue Model

Company Description

Portillo's Inc., together with its subsidiaries, engages in the ownership and operation of fast casual and quick service restaurants in the United States. The company offers Chicago-style hot dogs and sausages, Italian beef sandwiches, char-grilled burgers, chopped salads, crinkle-cut French fries, homemade chocolate cakes, and chocolate cake shakes. As of March 10, 2022, it operated in 70 locations across nine states. The company also offers its products through its website. Portillo's Inc. was founded in 1963 and is based in Oak Brook, Illinois.

How the Company Makes Money

Portillo's generates revenue primarily through the sale of food and beverages at its restaurant locations. The company's revenue streams include in-restaurant dining, takeout, and drive-thru services. Additionally, Portillo's leverages its brand reputation to engage in catering services, which constitute a significant part of its revenue, especially for events and large gatherings. The company also benefits from its online ordering platform, which facilitates delivery and pick-up services, further expanding its customer reach. Strategic location choices and a focus on high-traffic areas contribute to its earnings, along with seasonal promotions and limited-time menu offerings that drive customer engagement and sales. Portillo's does not currently have any significant partnerships that substantially affect its revenue model.

Portillo's Financial Statement Overview

Summary

Portillo's demonstrates strong financial health with robust revenue growth and improved profitability metrics, though there is room for improvement in operating efficiencies and capital expenditure management.

Income Statement

Portillo's exhibits strong revenue growth with a TTM (Trailing-Twelve-Months) increase of 6.0% from the previous year. The gross profit margin has improved to 42.8% from 38.8% in 2022, showing enhanced cost efficiency. Net profit margin stands at 3.9% TTM, which is a positive turn from previous losses, indicating better profitability management. However, the EBITDA margin at 13.0% suggests room for improving operating efficiencies compared to industry standards.

Balance Sheet

The company's balance sheet shows a moderate Debt-to-Equity ratio of 1.50 TTM, indicating a balanced leverage position relative to equity. Return on Equity (ROE) has improved to 6.9% TTM, reflecting better utilization of equity to generate profits. The equity ratio is 27.1% TTM, which suggests a stable capital structure but indicates potential risk if debt levels increase.

Cash Flow

Operating cash flow to net income ratio of 3.48 TTM highlights strong cash generation relative to net profits. Free cash flow growth rate is negative at -17.6% TTM, mainly due to increased capital expenditures, which could impact cash reserves if not managed carefully. The free cash flow to net income ratio is 0.29 TTM, demonstrating some reliance on free cash flow to support net income.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	721.16M	710.55M	679.90M	587.10M	534.95M	455.47M
Gross Profit	308.37M	168.11M	275.17M	132.51M	142.08M	121.94M
EBITDA	93.72M	94.79M	79.85M	61.50M	52.78M	81.22M
Net Income	28.27M	29.52M	18.42M	10.85M	-54.00M	-8.26M
Balance Sheet
Total Assets	1.50B	1.50B	1.39B	1.28B	999.57M	910.22M
Cash, Cash Equivalents and Short-Term Investments	12.94M	22.88M	10.44M	44.43M	39.26M	41.21M
Total Debt	611.60M	596.23M	550.41M	523.60M	319.15M	469.70M
Total Liabilities	1.00B	1.01B	925.43M	847.18M	576.17M	769.51M
Stockholders Equity	406.88M	401.06M	322.38M	256.34M	171.26M	140.71M
Cash Flow
Free Cash Flow	8.12M	9.85M	-17.14M	9.83M	6.69M	36.82M
Operating Cash Flow	98.41M	98.04M	70.78M	56.89M	42.87M	58.27M
Investing Cash Flow	-90.22M	-88.11M	-87.84M	-47.02M	-36.26M	-21.42M
Financing Cash Flow	-8.45M	2.51M	-16.93M	-4.71M	-8.78M	-18.05M

Portillo's Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 6.75
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Negative
• MACD: Negative
• RSI: Positive
• STOCH: Positive

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For PTLO, the sentiment is Negative. The current price of 6.75 is below the 20-day moving average (MA) of 7.28, below the 50-day MA of 9.35, and below the 200-day MA of 11.21, indicating a bearish trend. The MACD of -0.69 indicates Negative momentum. The RSI at 28.34 is Positive, neither overbought nor oversold. The STOCH value of 13.09 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for PTLO.

Portillo's Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
CAKE	68 Neutral	$3.04B	18.80	41.01%	1.78%	4.77%	38.24%
PTLO	67 Neutral	$508.60M	14.93	7.36%	―	3.62%	17.67%
FWRG	67 Neutral	$1.14B	284.25	0.69%	―	14.53%	-83.26%
BJRI	64 Neutral	$750.01M	28.23	7.12%	―	4.07%	-1.24%
CBRL	64 Neutral	$1.16B	20.99	12.90%	1.89%	2.84%	-4.44%
Sector *	61 Neutral	$17.97B	12.87	-5.30%	2.97%	1.26%	-14.45%
PZZA	60 Neutral	$1.55B	21.25	-20.16%	3.81%	-1.46%	8.10%

Portillo's Corporate Events

Portillo’s Reports Strong Q2 2025 Financial Results

Portillo’s Inc. reported its financial results for the second quarter of 2025, showing a revenue increase of 3.6% to $188.5 million and a net income rise of 17.7% to $10 million compared to the same period in 2024. Despite a challenging traffic environment, the company managed to maintain strong earnings and plans to open 12 new restaurants in the second half of 2025, focusing on expanding in the Sunbelt region and introducing new restaurant formats to improve efficiency and consumer engagement.

Portillo’s Appoints Eugene Lee to Board of Directors

On June 16, 2025, Portillo’s announced the appointment of Eugene I. Lee, Jr., a seasoned leader in the restaurant industry, to its Board of Directors. Mr. Lee, who previously served as CEO of Darden Restaurants, is expected to bring valuable expertise in operations and growth strategy to Portillo’s. His appointment aligns with Portillo’s cooperation agreement and is supported by Engaged Capital, LLC, highlighting the company’s focus on continued growth and value creation for stakeholders.

Portillo’s Holds Annual Shareholders Meeting, Elects Directors

On June 10, 2025, Portillo’s Inc. held its Annual Meeting of Shareholders where eight directors were elected to serve until the next annual meeting in 2026. Shareholders approved the compensation of the company’s Named Executive Officers and ratified Deloitte & Touche LLP as the independent auditor for fiscal year 2025. A shareholder proposal regarding stockholders’ ability to call special meetings was rejected. The company had previously announced a cooperation agreement with Engaged Capital, LLC on April 28, 2025.