Texas Roadhouse (TXRH) AI Stock Analysis

• Market Cap: $12.36B
• Dividend Yield: 1.63%
• Average Volume (3M): 980.96K
• Price to Earnings (P/E): 28.5
• Beta (1Y): 0.46
• Revenue Growth: 14.40%
• EPS Growth: 12.45%
• Country: US
• Employees: 95,000
• Sector: Consumer Cyclical
• Sector Strength: 84
• Industry: Restaurants
• EPS (TTM): 1.28
• Shares Outstanding: 66,146,080
• 10 Day Avg. Volume: 1,259,945
• 30 Day Avg. Volume: 980,964
• PEG Ratio: -4.52
• Price to Book (P/B): 7.54
• Price to Sales (P/S): 1.87
• P/FCF Ratio: 15.08
• Enterprise Value/Market Cap: 1.10
• Enterprise Value/Revenue: 2.32
• Enterprise Value/Gross Profit: 7.61
• Enterprise Value/Ebitda: 19.22
• 1Y Price Target: $194.41
• Price Target Upside: 8.72% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 18
• EPS Forecast (FY): N/A
• Revenue Forecast (FY): N/A

• Rating: 68 Neutral
• Price Target: $199.00 ▲(11.29% Upside)
• Action: Downgraded Date: 02/21/26
• Date: Action: Downgraded 02/21/26

The score is driven primarily by strong financial performance and cash generation, alongside continued unit growth plans and positive early-2026 sales momentum. Offsetting factors are elevated margin pressure and cost inflation called out in guidance, a higher 2025 leverage profile, and a valuation that remains demanding versus near-term profitability risk.

Positive Factors

Cash generation & FCF

Strong operating cash flow (over $730M in 2025) and improving free cash flow provide durable internal funding for unit growth, dividends and buybacks. Reliable cash conversion supports reinvestment and cushions macro shocks, reducing reliance on external financing over the medium term.

Unit growth & unit economics

Consistent unit expansion combined with high average unit volumes demonstrates scalable economics and attractive returns (targeting mid‑teen IRR). Ongoing openings and franchise acquisitions expand scale, spreading fixed costs and enhancing long-term margin potential at the store level.

Recurring comparable sales momentum

A long track record of same-store sales growth signals resilient brand demand and customer loyalty. Persistent traffic gains and recurring comps help sustain pricing power and unit-level profitability, underpinning multi-year revenue visibility even in varied economic cycles.

Negative Factors

Beef-driven commodity inflation

Persistent, beef-led commodity inflation is a structural margin headwind. Given steak-heavy menu mix, cost spikes are hard to fully pass to customers without impacting traffic, so restaurant margin percentages face sustained pressure and limit margin recovery over the next several quarters.

Higher leverage in 2025

A pronounced increase in debt reduces financial flexibility and raises refinancing and interest-rate vulnerability. If commodity or labor pressures persist, higher leverage constrains the company's ability to invest or respond to shocks, increasing downside risk to cash flow resilience.

Margin & EPS volatility

Sharp EPS and restaurant-margin declines despite revenue growth indicate earnings sensitivity to cost swings and calendar effects. This volatility undermines predictable profitability and makes multi-period earnings targets harder to sustain without durable cost control or pricing power.

Texas Roadhouse Business Overview & Revenue Model

Company Description

Texas Roadhouse, Inc., together with its subsidiaries, operates casual dining restaurants in the United States and internationally. The company operates and franchises restaurants under the Texas Roadhouse, Bubba's 33, and Jaggers names. As of December 28, 2021, it operated 566 domestic restaurants and 101 franchise restaurants. Texas Roadhouse, Inc. was founded in 1993 and is based in Louisville, Kentucky.

How the Company Makes Money

Texas Roadhouse generates revenue primarily through the sale of food and beverages in its restaurants. The company's revenue model is built around its casual dining experience, which encourages repeat visits and customer loyalty. Key revenue streams include dine-in services, takeout, and catering options. Additionally, Texas Roadhouse benefits from its strategic focus on high-quality ingredients and value pricing, which attract a broad customer base. The company also engages in promotional campaigns and seasonal menu offerings to drive sales. While Texas Roadhouse does not typically rely on significant external partnerships, its strong brand recognition and reputation help maintain a loyal customer base, contributing to consistent earnings growth.

Texas Roadhouse Financial Statement Overview

Summary

Strong multi-year revenue growth and healthy profitability vs. 2020, supported by robust operating cash flow and improving free cash flow into 2025. The main offsets are softer net income in 2025 despite higher revenue and a sharp step-up in 2025 debt that increases financial risk and reduces flexibility.

Income Statement

Revenue has expanded strongly from 2020 to 2024, with continued growth into 2025, indicating solid demand and unit/economic momentum. Profitability has improved materially versus 2020, with healthier operating and net margins through 2021–2024, supporting resilient earnings power. The key watch-out is a step-down in net income in 2025 despite higher revenue, and reported operating margin data for 2025 appears inconsistent versus prior years, adding some uncertainty to year-to-year margin interpretation.

Balance Sheet

Leverage looked reasonable and improving through 2024 (debt at well under 1x equity), alongside strong returns for a restaurant operator. However, 2025 shows a sharp jump in total debt while equity rises only modestly, implying meaningfully higher balance-sheet risk and reduced flexibility if operating trends soften. Also, some 2025 leverage/return fields are missing or appear inconsistent, which limits confidence in a clean read on the latest-period balance-sheet quality.

Cash Flow

Cash generation is a clear strength: operating cash flow is robust and has generally trended upward, and free cash flow improved substantially by 2024 and again in 2025. Cash conversion is solid, with free cash flow covering net income well in 2025 and improving versus weaker conversion in 2022–2023. The main weakness is volatility in free-cash-flow growth (notably dips in 2022–2023), suggesting sensitivity to reinvestment cycles and working-capital swings.

Breakdown	Dec 2025	Dec 2024	Dec 2023	Dec 2022	Dec 2021
Income Statement
Total Revenue	5.88B	5.37B	4.63B	4.01B	3.46B
Gross Profit	729.92M	947.26M	735.08M	653.63M	606.50M
EBITDA	709.23M	695.90M	507.47M	459.03M	424.69M
Net Income	405.55M	433.59M	304.88M	269.82M	245.29M
Balance Sheet
Total Assets	3.55B	3.19B	2.79B	2.53B	2.51B
Cash, Cash Equivalents and Short-Term Investments	134.71M	245.22M	104.25M	173.86M	335.64M
Total Debt	1.89B	854.47M	770.89M	753.36M	744.84M
Total Liabilities	2.07B	1.82B	1.64B	1.50B	1.44B
Stockholders Equity	1.46B	1.36B	1.14B	1.01B	1.06B
Cash Flow
Free Cash Flow	730.07M	399.29M	217.95M	265.60M	268.13M
Operating Cash Flow	730.07M	753.63M	564.98M	511.73M	468.83M
Investing Cash Flow	-482.81M	-336.90M	-367.17M	-263.73M	-195.10M
Financing Cash Flow	-357.77M	-275.75M	-267.43M	-409.77M	-301.23M

Texas Roadhouse Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 178.82
• 50DMA: Negative
• 100DMA: Positive
• 200DMA: Positive
• MACD: Positive
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For TXRH, the sentiment is Negative. The current price of 178.82 is below the 20-day moving average (MA) of 184.42, below the 50-day MA of 179.93, and above the 200-day MA of 177.09, indicating a neutral trend. The MACD of 0.23 indicates Positive momentum. The RSI at 43.29 is Neutral, neither overbought nor oversold. The STOCH value of 33.48 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for TXRH.

Texas Roadhouse Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
CAVA	73 Outperform	$7.86B	58.99	19.84%	―	23.93%	153.50%
TXRH	68 Neutral	$12.36B	28.54	28.77%	1.63%	14.40%	12.45%
EAT	68 Neutral	$6.89B	15.21	177.80%	―	23.18%	138.17%
DPZ	68 Neutral	$12.94B	22.38	―	1.63%	3.92%	4.98%
CAKE	66 Neutral	$3.19B	20.94	―	2.11%	4.90%	27.14%
WING	62 Neutral	$7.75B	44.96	―	0.45%	15.56%	79.02%
Sector *	61 Neutral	$18.38B	12.79	-2.54%	3.03%	1.52%	-15.83%

Texas Roadhouse Corporate Events

Texas Roadhouse Hikes Dividend Despite Earnings Pressure

Texas Roadhouse reported fourth-quarter 2025 revenue rising 3.1% to $1.48 billion and full-year revenue up 9.4% to $5.88 billion, but income from operations and net income declined for both periods, reflecting commodity and labor inflation and the absence of the extra 2024 week. Comparable restaurant sales increased 4.2% in the quarter and 4.9% for the year, average weekly sales and to-go volumes improved, and the company opened 28 company units and four franchises in 2025 while spending heavily on capex, franchise buyouts, dividends, and share repurchases.

On February 18, 2026, the board raised the quarterly dividend to $0.75 per share and approved its payment on March 31, 2026, even as earnings per share slipped 26.1% in the quarter and 5.8% for the year. Management highlighted record franchise acquisitions, additional store openings, and early 2026 same-store sales growth of 8.2%, alongside a planned April menu price increase of about 1.9%, while also extending a $100,000-per-quarter stipend for Chief Accounting and Financial Services Officer Keith Humpich through June 30, 2026 to support the CFO transition.

The most recent analyst rating on (TXRH) stock is a Buy with a $200.00 price target. To see the full list of analyst forecasts on Texas Roadhouse stock, see the TXRH Stock Forecast page.

Texas Roadhouse updates executive compensation with performance incentives

On December 30, 2025, the Compensation Committee of Texas Roadhouse’s board approved a comprehensive adjustment to 2026 compensation for its principal executive, financial, accounting officers and other named executives, aligning base salary increases with parameters used for support center employees. Effective January 8, 2026, annual base salaries were raised, led by CEO Jerry Morgan at $1.475 million, and the committee also set 2026 short-term cash incentive targets tied to pre-tax profits, comparable restaurant traffic growth and store week growth, with payouts ranging from zero up to 200% of target for most executives and 150% of target for one executive. The committee further authorized sizable equity awards, including service-based restricted stock units vesting in 2027, performance-based restricted stock units vesting in 2029 contingent on achieving earnings-per-share growth of 33% versus 2025 and pre-tax profit goals, and long-term service stock units vesting between 2028 and 2031 with post-vesting sale restrictions for certain officers. The package underscores Texas Roadhouse’s emphasis on performance-linked and long-duration equity incentives to retain leadership, align executives with shareholder value creation, and support the company’s growth and profitability objectives over the medium and long term.

The most recent analyst rating on (TXRH) stock is a Hold with a $175.00 price target. To see the full list of analyst forecasts on Texas Roadhouse stock, see the TXRH Stock Forecast page.

Texas Roadhouse Appoints New CFO and Leadership Team

On December 1, 2025, Texas Roadhouse announced the appointment of Michael Lenihan as Chief Financial Officer, effective December 3, 2025. Lenihan, with nearly 30 years of finance experience, will oversee key financial functions at the company. Additionally, Keith Humpich was promoted to Chief Accounting and Financial Services Officer, and Sean Renfroe was named General Counsel, both effective December 3, 2025. These appointments reflect the company’s strategic focus on strengthening its leadership team to support its growth and operational excellence.

The most recent analyst rating on (TXRH) stock is a Buy with a $188.00 price target. To see the full list of analyst forecasts on Texas Roadhouse stock, see the TXRH Stock Forecast page.