Texas Roadhouse (TXRH) AI Stock Analysis

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Texas Roadhouse

(NASDAQ:TXRH)

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Outperform 72 (OpenAI - 4o)

Rating:72Outperform

Price Target:

$185.00

▲(11.26% Upside)

Texas Roadhouse's overall stock score reflects strong financial performance and positive corporate developments, offset by technical indicators suggesting a bearish trend and valuation concerns. The company's robust expansion plans and strategic leadership changes are significant positives, while commodity inflation and margin pressures pose risks.

Positive Factors

Revenue Growth

Consistent revenue growth indicates strong market demand and effective business strategies, supporting long-term financial stability.

Expansion Plans

Aggressive expansion plans demonstrate confidence in market opportunities and potential for increased market share.

Technology Advancements

Technology upgrades enhance operational efficiency and customer experience, providing a competitive edge in the restaurant industry.

Negative Factors

Commodity Inflation

Rising commodity costs can pressure margins and profitability, posing a risk to financial performance if not managed effectively.

Restaurant Margin Challenges

Decreasing margins indicate cost pressures and operational challenges, which could impact long-term profitability.

Higher Capital Expenditures

Increased capital expenditures may strain cash flow and limit financial flexibility, affecting future investment capacity.

Texas Roadhouse (TXRH) vs. SPDR S&P 500 ETF (SPY)

Market Cap

$11.00B

Dividend Yield1.64%

Average Volume (3M)1.05M

Price to Earnings (P/E)25.4

Beta (1Y)0.47

Revenue Growth14.40%

EPS Growth12.45%

CountryUS

Employees95,000

SectorConsumer Cyclical

Sector Strength84

IndustryRestaurants

Share Statistics

EPS (TTM)1.25

Shares Outstanding66,146,080

10 Day Avg. Volume723,051

30 Day Avg. Volume1,046,876

Financial Highlights & Ratios

PEG Ratio0.65

Price to Book (P/B)8.87

Price to Sales (P/S)2.24

P/FCF Ratio30.16

Enterprise Value/Market Cap1.08

Enterprise Value/Revenue2.04

Enterprise Value/Gross Profit12.19

Enterprise Value/Ebitda16.53

Forecast

1Y Price Target

$189.40

Price Target Upside13.91% Upside

Rating ConsensusModerate Buy

Number of Analyst Covering18

EPS Forecast (FY)6.36

Revenue Forecast (FY)$5.90B

Texas Roadhouse Business Overview & Revenue Model

Company DescriptionTexas Roadhouse, Inc. is a popular American chain of casual dining restaurants known for its hand-cut steaks, ribs, and made-from-scratch sides. Founded in 1993 and headquartered in Louisville, Kentucky, the company operates primarily in the full-service restaurant sector, focusing on providing a unique dining experience characterized by a lively atmosphere, country music, and a commitment to quality food. Texas Roadhouse offers a diverse menu that includes a variety of beef, chicken, and seafood dishes, along with its signature freshly baked bread and cinnamon butter.

How the Company Makes MoneyTexas 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 Key Performance Indicators (KPIs)

Any

Restaurant Count

Restaurant Count
Shows the total number of Texas Roadhouse locations, indicating the company’s expansion strategy and market penetration.

Chart InsightsTexas Roadhouse is experiencing robust expansion, with a consistent increase in restaurant count, reaching 792 by early 2025. This growth aligns with their strategy to open 30 new locations this year, including Bubba's 33 and Jaggers. Despite challenges like commodity and labor inflation, the company is leveraging technological upgrades and strong revenue growth to support expansion. The focus on high-quality service and effective execution is driving positive traffic and sales momentum, indicating resilience against economic pressures.

Data provided by:

The Fly

Texas Roadhouse Earnings Call Summary

Earnings Call Date:Nov 06, 2025

(Q3-2025)

% Change Since: |

Next Earnings Date:Feb 19, 2026

Earnings Call Sentiment Neutral

The earnings call presented a mix of strong revenue growth and expansion plans, alongside challenges with commodity inflation and declining margins. While there were significant achievements in terms of expansion and consumer engagement, financial pressures from rising costs and margin declines were notable concerns.

Q3-2025 Updates

Positive Updates

Record-Breaking Revenue and Growth

Texas Roadhouse reported strong top-line momentum with revenue surpassing $1.4 billion, marking the highest quarterly growth of the year in revenue, same-store sales, and traffic.

Expansion and Development Success

The company opened 7 company-owned locations in Q3 and acquired 20 franchise restaurants this year. Plans to open approximately 35 company-owned restaurants in 2026 were also announced.

Positive Consumer Behavior

Guests favored steaks and larger-sized entrees, with positive responses to new beverage offerings and a successful regional approach to the beverage menu.

Strong To-Go Business

The To-Go segment showed solid momentum, with improvements in speed and order accuracy enhancing the overall guest experience.

Retail Expansion

Texas Roadhouse's retail strategy has succeeded, with products present in over 120,000 retail outlets nationwide, enhancing brand awareness.

Technology Advancements

Approximately 95% of restaurants are using a digital kitchen and upgraded guest management system, with full rollout expected by year-end.

Negative Updates

Commodity Inflation Concerns

Inflation in Q3 was above expectations due to higher-than-anticipated beef prices, leading to an updated full-year 2025 commodity inflation guidance of approximately 6%.

Restaurant Margin Challenges

Restaurant margin as a percentage of total sales decreased 168 basis points year-over-year to 14.3%, driven by commodity inflation and shifts in the on-trade category.

Diluted EPS Decline

There was a 0.8% decrease in diluted earnings per share to $1.25.

Higher Capital Expenditures

Capital expenditures increased, with $214 million offsetting cash flow from operations, and 2026 guidance set at approximately $400 million.

Company Guidance

During the Texas Roadhouse Third Quarter Earnings Conference Call, the company reported strong financial performance, with revenue exceeding $1.4 billion, marking the highest quarterly growth for the year in revenue, same-store sales, and traffic. The company opened seven new company-owned locations in the third quarter and plans to open approximately 30 restaurants across its three brands in 2025. Texas Roadhouse expects to open around 35 company-owned restaurants in 2026, including 20 Texas Roadhouses, 10 Bubba's 33, and up to 5 Jaggers. Additionally, the company acquired 20 franchise restaurants this year and plans to acquire five more in California at the beginning of 2026. The guidance for 2025 indicates a commodity inflation rate of approximately 6%, with beef prices being a significant factor. For 2026, the company forecasts a 7% commodity inflation rate and a wage and labor inflation rate of 3% to 4%. Capital expenditures for 2026 are projected to be around $400 million, excluding the cost of franchise acquisitions. In terms of consumer behavior, guests favored larger entrees and steak, with a 1.7% menu price increase having no noticeable change in guest behavior. On the technology front, about 95% of restaurants have implemented a digital kitchen and upgraded guest management systems, which are expected to be fully rolled out by year-end.

Texas Roadhouse Financial Statement Overview

Summary

Texas Roadhouse exhibits solid financial health with strong revenue growth and profitability. The balance sheet is stable, with manageable leverage and impressive returns on equity. While cash flow generation is strong, the decline in free cash flow growth highlights the need for enhanced cash management strategies.

Income Statement

Very Positive

Texas Roadhouse has demonstrated strong revenue growth with a 3.11% increase in TTM, supported by a solid gross profit margin of 20.14%. The net profit margin is healthy at 7.72%, indicating effective cost management. However, there is a slight decline in EBIT and EBITDA margins compared to the previous year, suggesting potential pressure on operational efficiency.

Balance Sheet

Positive

The company's debt-to-equity ratio of 0.64 indicates a balanced approach to leverage, while the return on equity is robust at 31.87%, reflecting strong profitability. The equity ratio stands at 44.56%, showcasing a stable financial structure. However, the increase in total debt over the years warrants monitoring.

Cash Flow

Positive

Operating cash flow is strong, with a coverage ratio of 1.04, indicating good cash generation relative to net income. However, the free cash flow growth rate has declined by 5.18%, and the free cash flow to net income ratio is moderate at 50.32%, suggesting room for improvement in cash flow management.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	5.83B	5.37B	4.63B	4.01B	3.46B	2.40B
Gross Profit	975.31M	947.26M	735.08M	653.63M	606.50M	283.59M
EBITDA	718.98M	695.90M	507.47M	459.03M	424.69M	141.22M
Net Income	436.75M	433.59M	304.88M	269.82M	245.29M	31.25M
Balance Sheet
Total Assets	3.27B	3.19B	2.79B	2.53B	2.51B	2.33B
Cash, Cash Equivalents and Short-Term Investments	108.17M	245.22M	104.25M	173.86M	335.64M	363.15M
Total Debt	933.74M	854.47M	770.89M	753.36M	744.84M	831.44M
Total Liabilities	1.79B	1.82B	1.64B	1.50B	1.44B	1.38B
Stockholders Equity	1.46B	1.36B	1.14B	1.01B	1.06B	927.50M
Cash Flow
Free Cash Flow	340.53M	399.29M	217.95M	265.60M	268.13M	76.04M
Operating Cash Flow	747.14M	753.63M	564.98M	511.73M	468.83M	230.44M
Investing Cash Flow	-483.89M	-336.90M	-367.17M	-263.73M	-195.10M	-161.10M
Financing Cash Flow	-344.29M	-275.75M	-267.43M	-409.77M	-301.23M	185.94M

Texas Roadhouse Technical Analysis

Technical Analysis Sentiment

Negative

Last Price166.27

Price Trends

50DMA

168.42

Negative

100DMA

170.85

Negative

200DMA

174.00

Negative

Market Momentum

MACD

0.36

Positive

RSI

45.56

Neutral

STOCH

12.35

Positive

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 166.27 is below the 20-day moving average (MA) of 168.60, below the 50-day MA of 168.42, and below the 200-day MA of 174.00, indicating a bearish trend. The MACD of 0.36 indicates Positive momentum. The RSI at 45.56 is Neutral, neither overbought nor oversold. The STOCH value of 12.35 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for TXRH.

Texas Roadhouse Risk Analysis

Texas Roadhouse disclosed 34 risk factors in its most recent earnings report. Texas Roadhouse 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

Texas Roadhouse Peers Comparison

Overall Rating

UnderperformOutperform

Sector (61)

Financial Indicators

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
TXRH	72 Outperform	$11.00B	25.40	31.55%	1.64%	14.40%	12.45%
WING	70 Outperform	$7.16B	42.05	―	0.44%	15.56%	79.02%
EAT	70 Neutral	$6.24B	14.56	249.07%	―	23.18%	138.17%
CAVA	70 Neutral	$6.19B	46.00	19.84%	―	23.93%	153.50%
DPZ	68 Neutral	$14.07B	24.34	―	1.62%	3.92%	4.98%
CAKE	67 Neutral	$2.34B	14.27	39.14%	2.30%	4.90%	27.14%
Sector *	61 Neutral	$18.38B	12.79	-2.54%	3.03%	1.52%	-15.83%

* Consumer Cyclical Sector Average

Performance Comparison

TXRH

Texas Roadhouse

166.27

-22.61

-11.97%

EAT

Brinker International

140.45

17.69

14.41%

DPZ

Domino's Pizza

416.55

-34.35

-7.62%

CAKE

Cheesecake Factory

46.98

-0.79

-1.65%

WING

Wingstop

257.56

-69.55

-21.26%

CAVA

CAVA Group, Inc.

53.37

-79.20

-59.74%

Texas Roadhouse Corporate Events

Executive/Board ChangesBusiness Operations and Strategy

Texas Roadhouse Appoints New CFO and Leadership Team

Positive

Dec 2, 2025

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.

DividendsBusiness Operations and StrategyFinancial Disclosures

Texas Roadhouse Declares Quarterly Dividend Amid Revenue Growth

Positive

Nov 6, 2025

On November 5, 2025, Texas Roadhouse‘s Board of Directors approved a quarterly cash dividend of $0.68 per share, payable on December 30, 2025. The company reported a 12.8% increase in total revenue for the third quarter of 2025 compared to the previous year, despite a slight decrease in net income. The company opened seven new company restaurants and two franchise restaurants during this period. Texas Roadhouse plans to continue its growth strategy through new store development and franchise acquisitions, while managing inflationary pressures and maintaining shareholder value through dividends and share repurchases.

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: Dec 07, 2025