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Portillo's (PTLO)
NASDAQ:PTLO
US Market

Portillo's (PTLO) AI Stock Analysis

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Portillo's

(NASDAQ:PTLO)

Rating:74Outperform
Price Target:
$13.00
▲(6.12%Upside)
Portillo's overall stock score is driven by its strong financial performance and strategic initiatives highlighted in the earnings call. However, valuation concerns and technical indicators showing lack of momentum moderate the score. The company's ability to manage economic uncertainties and optimize operational efficiencies will be crucial for future growth.
Positive Factors
Customer Engagement
Portillo’s new app-less loyalty program is expected to drive improved frequency following a shift to more targeted text-based offers.
Operational 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.
Negative Factors
Cost Challenges
Restaurant-level margin contracted a greater-than-expected 110 basis points to 20.8% on higher commodity and labor costs.
Revenue Performance
Revenue lagged estimates by about 4% and consensus by 6%, reflecting a slower-than-expected start from units that opened in the fourth quarter.

Portillo's (PTLO) vs. SPDR S&P 500 ETF (SPY)

Portillo's Business Overview & Revenue Model

Company DescriptionPortillo'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 MoneyPortillo'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 Earnings Call Summary

Earnings Call Date:May 06, 2025
(Q1-2025)
|
% Change Since: 17.79%|
Next Earnings Date:Jul 31, 2025
Earnings Call Sentiment Neutral
The earnings call highlighted a solid revenue increase and positive impacts from new initiatives like the loyalty program and advertising campaigns. However, these were tempered by slower starts in new markets, increased costs, and economic uncertainties affecting overall growth projections.
Q1-2025 Updates
Positive Updates
Revenue Growth and Strong Same Restaurant Sales
Total revenue for the first quarter was $176.4 million, reflecting an increase of $10.6 million or 6.4% compared to last year. Same restaurant sales increased by 1.8%, contributing to a revenue increase of approximately $2.6 million.
Successful Launch of Portillo's Perks Loyalty Program
The Portillo's Perks loyalty program was launched near the end of Q1 with promising early results. The program aims for a personalized data-driven approach to loyalty and has already seen solid redemption rates for initial offers.
Positive Impact of Dallas-Fort Worth Advertising Campaign
The advertising campaign in Dallas-Fort Worth increased brand awareness by about 10% and drove a high-single-digit increase in sales for local restaurants.
Operational Enhancements and New Market Expansions
Portillo's plans to open 12 new restaurants in 2025, including innovative formats like the 'restaurant of the future' and in-line walk-up locations, aiming to expand into new markets and optimize operations.
Negative Updates
Slower Start in New Markets
New restaurants opened in Q4 2024 experienced a slower start, especially in markets like Houston where brand awareness is lower compared to established areas like Dallas.
Increased Costs and Margin Pressure
Food, beverage, and packaging costs as a percentage of revenues increased to 34.6% from 34.3% due to a 3.4% increase in commodity prices. Restaurant level adjusted EBITDA margins decreased by 110 basis points to 20.8%.
Labor Cost Increases
Labor as a percentage of revenues rose to 26.6% from 26.1%, driven by lower transactions, increased benefit expenses, and wage rate investments.
Challenging Economic Environment
Economic uncertainty and macro pressures such as declining consumer confidence, weather challenges, and tariffs have affected overall performance and led to a more conservative revenue growth outlook.
Company Guidance
During the fiscal first quarter 2025 earnings call, Portillo's provided a detailed update on various performance metrics and future expectations. The company reported a same restaurant sales increase of 1.8% and total revenue reaching $176.4 million. The restaurant level adjusted EBITDA was $36.7 million, with a margin of 20.8%. Despite challenges such as declining consumer confidence and bad weather, Portillo's maintained momentum through initiatives like their Portillo's Perks loyalty program and advertising campaigns in Dallas-Fort Worth, which increased brand awareness by about 10% and drove a high single-digit sales increase. The company plans to open 12 new restaurants in 2025, with updated revenue growth expectations in the range of 10% to 12%. They are estimating general and administrative expenses to be between $80 million and $82 million, and adjusted EBITDA growth between 5% to 8%. Portillo's has also been testing a breakfast offering in five Chicagoland locations and continues to optimize their drive-thru and kiosk operations. The company remains focused on accelerating revenue, expanding margins, and leveraging traffic-driving initiatives to achieve their goals amidst economic uncertainties.

Portillo's Financial Statement Overview

Summary
Portillo's demonstrates strong financial health with consistent revenue growth and improved profitability metrics. The balance sheet shows a healthy leverage position, though there's a need for careful debt management. Cash flow generation is strong, but negative free cash flow growth due to increased capital expenditures requires attention.
Income Statement
85
Very Positive
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
78
Positive
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
80
Positive
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.
BreakdownTTMDec 2024Dec 2023Dec 2022Dec 2021Dec 2020
Income Statement
Total Revenue721.16M710.55M679.90M587.10M534.95M455.47M
Gross Profit308.37M492.83M275.17M132.51M142.08M121.94M
EBITDA93.72M94.79M79.85M61.50M52.78M81.22M
Net Income28.27M29.52M18.42M10.85M-54.00M-8.26M
Balance Sheet
Total Assets1.50B1.50B1.39B1.28B999.57M910.22M
Cash, Cash Equivalents and Short-Term Investments12.94M22.88M10.44M44.43M39.26M41.21M
Total Debt611.60M596.23M550.41M523.60M319.15M469.70M
Total Liabilities1.00B1.01B925.43M847.18M576.17M769.51M
Stockholders Equity406.88M401.06M322.38M256.34M171.26M140.71M
Cash Flow
Free Cash Flow8.12M9.85M-17.14M9.83M6.69M36.82M
Operating Cash Flow98.41M98.04M70.78M56.89M42.87M58.27M
Investing Cash Flow-90.22M-88.11M-87.84M-47.02M-36.26M-21.42M
Financing Cash Flow-8.45M2.51M-16.93M-4.71M-8.78M-18.05M

Portillo's Technical Analysis

Technical Analysis Sentiment
Positive
Last Price12.25
Price Trends
50DMA
11.55
Positive
100DMA
12.29
Negative
200DMA
12.05
Positive
Market Momentum
MACD
0.03
Negative
RSI
58.75
Neutral
STOCH
82.78
Negative
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For PTLO, the sentiment is Positive. The current price of 12.25 is above the 20-day moving average (MA) of 11.64, above the 50-day MA of 11.55, and above the 200-day MA of 12.05, indicating a bullish trend. The MACD of 0.03 indicates Negative momentum. The RSI at 58.75 is Neutral, neither overbought nor oversold. The STOCH value of 82.78 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for PTLO.

Portillo's Risk Analysis

Portillo's disclosed 46 risk factors in its most recent earnings report. Portillo's 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

Portillo's Peers Comparison

Overall Rating
UnderperformOutperform
Sector (62)
Financial Indicators
Name
Overall Rating
Market Cap
P/E Ratio
ROE
Dividend Yield
Revenue Growth
EPS Growth
74
Outperform
$899.28M27.817.37%4.57%6.89%
74
Outperform
$3.15B20.0046.60%1.70%4.42%48.23%
71
Outperform
$1.44B25.0712.90%1.55%2.84%-4.44%
70
Neutral
$1.01B49.826.01%2.91%-4.86%
69
Neutral
$1.05B100.801.86%14.43%-53.71%
64
Neutral
$1.62B20.96-20.16%3.72%-2.77%4.01%
62
Neutral
$16.65B11.30-7.38%3.01%1.59%-23.30%
* Consumer Cyclical Sector Average
Performance Comparison
Ticker
Company Name
Price
Change
% Change
PTLO
Portillo's
12.25
2.76
29.08%
BJRI
BJ's Restaurants
46.78
10.45
28.76%
CBRL
Cracker Barrel
67.93
29.39
76.26%
PZZA
Papa John's International
49.88
8.08
19.33%
CAKE
Cheesecake Factory
65.27
28.61
78.04%
FWRG
First Watch Restaurant Group
17.56
1.75
11.07%

Portillo's Corporate Events

Executive/Board ChangesBusiness Operations and Strategy
Portillo’s Appoints Eugene Lee to Board of Directors
Positive
Jun 16, 2025

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.

The most recent analyst rating on (PTLO) stock is a Buy with a $18.00 price target. To see the full list of analyst forecasts on Portillo’s stock, see the PTLO Stock Forecast page.

Executive/Board ChangesShareholder Meetings
Portillo’s Holds Annual Shareholders Meeting, Elects Directors
Neutral
Jun 13, 2025

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.

The most recent analyst rating on (PTLO) stock is a Buy with a $18.00 price target. To see the full list of analyst forecasts on Portillo’s stock, see the PTLO Stock Forecast page.

Business Operations and StrategyFinancial Disclosures
Portillo’s Reports Q1 Revenue Growth Amid Expansion Plans
Neutral
May 6, 2025

Portillo’s Inc. reported its financial results for the first quarter ended March 30, 2025, showing a 6.4% increase in total revenue to $176.4 million, primarily due to new restaurant openings and a rise in same-restaurant sales. Despite facing challenging macro conditions, the company managed to improve operating income slightly to $10.4 million, though net income decreased by $1.4 million to $4.0 million. The company is focusing on strategies to drive traffic and improve margins, including the launch of a loyalty program and testing breakfast offerings. Portillo’s plans to open 12 new restaurants in 2025, targeting expansion in the Sunbelt region.

Executive/Board ChangesBusiness Operations and Strategy
Portillo’s Announces New Board Director Appointment
Neutral
Apr 28, 2025

On April 28, 2025, Portillo’s Inc. announced a cooperation agreement with Engaged Capital to appoint a new director with restaurant operating experience to its Board. This agreement aims to enhance the Board’s expertise and drive strategic initiatives to improve shareholder value, while Engaged Capital has agreed to certain standstill and voting commitments.

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.Date of analysis: Jul 01, 2025