Portillo's (PTLO) AI Stock Analysis

• Market Cap: $401.75M
• Dividend Yield: N/A
• Average Volume (3M): 1.79M
• Price to Earnings (P/E): 19.1
• Beta (1Y): 0.97
• Revenue Growth: 2.40%
• EPS Growth: -14.90%
• Country: US
• Employees: 8,512
• Sector: Consumer Cyclical
• Sector Strength: 84
• Industry: Restaurants
• EPS (TTM): 0.08
• Shares Outstanding: 71,932,310
• 10 Day Avg. Volume: 1,365,677
• 30 Day Avg. Volume: 1,787,596
• PEG Ratio: -0.40
• Price to Book (P/B): 0.68
• Price to Sales (P/S): 0.44
• P/FCF Ratio: -17.28
• Enterprise Value/Market Cap: 1.75
• Enterprise Value/Revenue: 0.96
• Enterprise Value/Gross Profit: 1.41
• Enterprise Value/Ebitda: 9.24
• 1Y Price Target: $6.25
• Price Target Upside: 18.37% Upside
• Rating Consensus: Hold
• Number of Analyst Covering: 8
• EPS Forecast (FY): 0.22
• Revenue Forecast (FY): $784.57M

• Rating: 55 Neutral
• Price Target: $5.50 ▲(4.17% Upside)
• Action: Reiterated Date: 02/25/26
• Date: Action: Reiterated 02/25/26

The score is held back primarily by inconsistent cash generation (recent negative free cash flow) and near-term operating headwinds highlighted on the earnings call (traffic softness, cost inflation, and Texas-related margin drag). Improved leverage and a reasonable mid-teens P/E provide partial support, but technicals remain weak versus key moving averages.

Positive Factors

Loyalty Program Growth

A >2M-member loyalty base gives Portillo’s durable channels to drive frequency, targeted promotions and higher attachment of sides/desserts. Over months this supports steadier transaction trends, better marketing ROI and data-driven menu/pricing decisions that can lift lifetime value and margin mix.

Validated Smaller Prototype

A high-volume Atlanta opening using a 20% smaller Future 1.0 prototype validates lower-capex unit economics and market demand. Measured rollouts of a smaller format reduce development risk, improve payback periods and allow disciplined expansion while preserving restaurant-level margins over time.

Improved Leverage Profile

Debt reduction to ~0.73 D/E and lower interest costs materially improve financial flexibility. A stronger balance-sheet trajectory reduces refinancing and liquidity risk, enabling investment in operations and measured growth while giving management room to deleverage further from positive free cash flow.

Negative Factors

Traffic & Same‑Store Sales Decline

A 3.3% same-store sales decline driven by lower transactions signals underlying demand softness. Persistent traffic weakness pressures operating leverage, increases unit-level labor and food cost as a percent of sales, and can slow margin recovery even with pricing or promotions over a multi-month horizon.

Weak Cash Generation

Volatile and negative free cash flow despite positive net income indicates fragile cash conversion and heavy reinvestment or working-capital strain. This constrains capacity to self-fund openings, pay down the revolver, and absorb inflationary shocks until consistent positive FCF is realized.

Texas Expansion Margin Drag

Material margin drag from the Texas market demonstrates execution risk in new regions. Losses that subtract ~170–180bps of restaurant margins erode consolidated profitability and require time and capital to remediate, increasing near-term unit economics uncertainty and limiting margin resilience.

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 operates a direct-to-consumer model, where customers can order food for dining in, carryout, or delivery. Key revenue streams include dine-in sales, takeout orders, and catering services for events. Additionally, Portillo's has expanded its brand through online ordering and delivery partnerships with third-party services, which has become increasingly significant in urban areas. The company's focus on high-quality ingredients and customer service helps drive repeat business and brand loyalty, contributing to its overall financial performance.

Portillo's Financial Statement Overview

Summary

Steady revenue growth and a meaningfully improved leverage profile support the outlook, but profitability remains thin and cash conversion is weak. Operating cash flow fell in 2025 and free cash flow has been volatile, turning negative again in 2025 despite positive net income.

Income Statement

Revenue has grown steadily since 2021 (with a dip in 2020), including mid-to-high single digit to mid-teens growth in most years (2025 annual revenue growth ~15.5%). Profitability is mixed: gross margin improved sharply in 2025, but bottom-line profitability remains thin (2025 net margin ~2.6%) and net income fell versus 2024 despite higher sales. EBITDA margin has also trended lower from 2020 levels and eased in 2025 versus 2024, suggesting cost pressure and limited operating leverage.

Balance Sheet

Leverage has improved meaningfully: debt-to-equity declined from very elevated levels in 2020–2022 to ~0.73 in 2025, driven by higher equity and lower debt. Return on equity remains modest (roughly 3%–9% historically; ~4.1% in 2025), consistent with thin net margins. Overall, the balance sheet trajectory is positive, but profitability is not yet strong enough to fully de-risk the story.

Cash Flow

Cash generation is uneven. Operating cash flow was positive each year, but weakened in 2025 and covered a relatively small portion of earnings (2025 operating cash flow to net income ~0.37). Free cash flow has been volatile and turned negative in 2023 and 2025, indicating heavier reinvestment needs and/or working-capital pressure; notably, 2025 free cash flow was negative despite positive net income.

Breakdown	Dec 2025	Dec 2024	Dec 2023	Dec 2022	Dec 2021
Income Statement
Total Revenue	732.07M	710.55M	679.90M	587.10M	534.95M
Gross Profit	499.74M	287.78M	275.17M	228.47M	229.40M
EBITDA	76.01M	94.79M	79.85M	67.53M	46.06M
Net Income	19.34M	29.52M	18.42M	10.85M	5.99M
Balance Sheet
Total Assets	1.61B	1.50B	1.39B	1.28B	999.57M
Cash, Cash Equivalents and Short-Term Investments	19.96M	22.88M	10.44M	44.43M	39.26M
Total Debt	342.32M	596.23M	550.41M	523.60M	319.15M
Total Liabilities	1.11B	1.01B	925.43M	847.18M	576.17M
Stockholders Equity	467.80M	401.06M	322.38M	256.34M	171.26M
Cash Flow
Free Cash Flow	-18.52M	9.85M	-17.14M	9.83M	6.69M
Operating Cash Flow	71.91M	98.04M	70.78M	56.89M	42.87M
Investing Cash Flow	-90.19M	-88.11M	-87.84M	-47.02M	-36.26M
Financing Cash Flow	15.37M	2.51M	-16.93M	-4.71M	-8.78M

Portillo's Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 5.28
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Negative
• MACD: Positive
• RSI: Neutral
• STOCH: Neutral

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 5.28 is below the 20-day moving average (MA) of 5.67, below the 50-day MA of 5.29, and below the 200-day MA of 7.46, indicating a bearish trend. The MACD of 0.02 indicates Positive momentum. The RSI at 42.19 is Neutral, neither overbought nor oversold. The STOCH value of 29.18 is Neutral, 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
NATH	73 Outperform	$411.82M	19.31	―	2.09%	7.81%	4.58%
BJRI	71 Outperform	$853.42M	30.59	8.44%	―	3.85%	7.57%
Sector *	61 Neutral	$18.38B	12.79	-2.54%	3.03%	1.52%	-15.83%
PTLO	55 Neutral	$401.75M	19.08	5.82%	―	2.40%	-14.90%
BLMN	46 Neutral	$500.22M	60.77	10.80%	10.60%	-13.07%	-1139.12%

Portillo's Corporate Events

Portillo’s Reports 2025 Results, Resets Growth Strategy

Portillo’s Inc. reported fourth-quarter and full-year 2025 results on February 24, 2026, showing modest revenue growth but weaker profitability as traffic softened and costs rose. Fourth-quarter revenue inched up 0.6% to $185.7 million while same-restaurant sales fell 3.3%, driving operating income down 25.3% to $10.3 million and net income down nearly half to $6.3 million, as higher commodity, labor and other operating expenses outpaced gains from new restaurant openings.

For fiscal 2025, revenue rose 3.0% to $732.1 million, supported by eight new restaurant openings, but same-restaurant sales slipped 0.5% and operating income dropped to $43.7 million from $58.0 million, with net income falling to $21.1 million from $35.1 million. Management responded by resetting its new restaurant growth strategy, refocusing on operational fundamentals and dynamic marketing, while leaning into its smaller RoTF 1.0 restaurant design, moves that aim to improve margins and traffic and could reshape the chain’s cost structure and growth profile under incoming CEO Brett Patterson.

The most recent analyst rating on (PTLO) stock is a Hold with a $6.00 price target. To see the full list of analyst forecasts on Portillo’s stock, see the PTLO Stock Forecast page.

Portillo’s Appoints Brett Patterson as New CEO

On February 11, 2026, Portillo’s announced that restaurant industry veteran Brett Patterson, formerly CEO of Miller’s Ale House and a longtime executive at Bloomin Brands’ Outback Steakhouse, will become President and Chief Executive Officer and join the board on February 23, 2026, assuming principal executive officer duties on February 25. He succeeds interim CEO Michael A. Miles Jr., who returns to his role as chairman and is expected to resume independent director status after his interim tenure.

Patterson will lead overall strategy with an emphasis on market positioning, new restaurant growth and operational excellence, while continuing investment in employees and guest experience. His compensation package, anchored by an $800,000 base salary, performance-based bonuses and substantial equity awards, underscores Portillo’s intention to align leadership incentives with long-term profitable growth and value creation for shareholders, guests and team members.

The most recent analyst rating on (PTLO) stock is a Hold with a $6.00 price target. To see the full list of analyst forecasts on Portillo’s stock, see the PTLO Stock Forecast page.

Portillo’s Highlights Growth Strategy at 2026 ICR Conference

On January 12, 2026, Portillo’s Inc. planned to present at the 2026 ICR Conference, with Interim Chief Executive Officer Mike Miles and Chief Financial Officer Michelle Hook outlining the company’s brand strength, growth performance and profitability initiatives to the investment community. The materials highlight Portillo’s strong customer enthusiasm, robust multi-channel sales mix and top-tier average unit volumes versus prominent fast-casual peers, alongside evidence of pent-up demand in new markets such as its Kennesaw, Georgia location, which opened on November 14, 2025 and delivered one of the chain’s largest openings to date. The presentation also underscores the company’s growing Perks loyalty program and details a broad range of operational, macroeconomic, technology, labor and regulatory risks that could affect its growth strategy and financial results, signaling both the opportunities and vulnerabilities that investors and other stakeholders need to consider.

The most recent analyst rating on (PTLO) stock is a Hold with a $6.00 price target. To see the full list of analyst forecasts on Portillo’s stock, see the PTLO Stock Forecast page.