Texas Roadhouse, Inc. (TXRH) Stock Analysis

Why this analysis is different

• A sector-relative MoonshotScore — five pillars (business quality, financial safety, valuation, growth durability, momentum) re-ranked nightly against the full universe of US-listed common stocks.
• An AI Council read across up to eight perspectives — value, macro, quantitative, and momentum lenses — that shows where they disagree instead of averaging the tension away.
• Figures come straight from FMP and Yahoo Finance filings data. The AI writes the narrative around the numbers — it never edits the numbers.

Texas Roadhouse, Inc. (TXRH) Consumer Business Overview

Texas Roadhouse, Inc. is a leading casual dining restaurant chain known for its steak-focused menu, lively atmosphere, and value pricing. Operating primarily in the United States with a growing international presence, the company competes in the highly competitive restaurant industry, balancing company-owned and franchised locations.

What Is the Investment Thesis for TXRH?

Texas Roadhouse, Inc. presents a compelling investment case based on its established brand, consistent performance, and growth potential. With a market capitalization of $12.9B and a P/E ratio of 28.2, the company demonstrates financial stability. A key value driver is the company's ability to maintain a strong profit margin of 6.8% and a gross margin of 18.7% in a competitive industry. Growth catalysts include continued expansion of both company-owned and franchised restaurants, as well as the potential for increased same-store sales. The company's dividend yield of 1.57% provides an additional incentive for investors. Potential risks include fluctuations in food costs and increased competition from other casual dining chains. The company's beta of 0.90 suggests lower volatility compared to the overall market.

Based on FMP financials and quantitative analysis

TXRH Key Highlights

• Market Cap of $12.9B reflects strong investor confidence in the brand and its growth potential.
• P/E Ratio of 28.2 indicates a premium valuation, suggesting expectations of future earnings growth.
• Profit Margin of 6.8% demonstrates effective cost management and pricing strategies.
• Gross Margin of 18.7% highlights the company's ability to control food and labor costs.
• Dividend Yield of 1.57% provides a steady income stream for investors, enhancing the stock's attractiveness.

Who Are TXRH's Competitors?

TXRH is benchmarked below against 8 industry peers on price, market cap, and our AI MoonshotScore.

AI Score by Stock Expert AI · Price data: FMP / Yahoo Finance

What Are TXRH's Key Strengths?

• Strong brand recognition and reputation.
• Loyal customer base.
• Efficient operations and cost management.
• Combination of company-owned and franchised restaurants.

What Are TXRH's Weaknesses?

• Vulnerability to fluctuations in food costs.
• Dependence on the U.S. market.
• Limited presence in certain geographic regions.
• Exposure to economic downturns affecting consumer spending.

What Could Drive TXRH Stock Higher?

• Continued expansion of restaurant locations, both domestically and internationally.
• Enhancement of digital ordering and delivery services to drive sales growth.
• Introduction of new menu items and limited-time offers to attract new customers.
• Implementation of loyalty programs and customer engagement initiatives to enhance customer retention.

What Are the Key Risks for TXRH?

• Insider selling — insiders were net sellers of roughly $4.4M recently.
• Fluctuations in food costs impacting profitability.
• Increased competition from other casual dining chains.
• Economic downturns affecting consumer spending.
• Regulatory changes impacting the restaurant industry.
• Changing consumer preferences and dietary trends.

What Are the Growth Opportunities for TXRH?

• Expansion of Restaurant Locations: Texas Roadhouse has the opportunity to continue expanding its restaurant footprint both domestically and internationally. The company can target underserved markets and leverage its franchising model to accelerate growth. The global restaurant market is projected to reach $4.16 trillion by 2027, offering significant potential for expansion. This expansion can drive revenue growth and increase brand awareness.
• Enhancement of Digital Ordering and Delivery: Investing in digital ordering platforms and delivery services can enhance customer convenience and drive sales growth. The online food delivery market is expected to reach $220 billion by 2027, presenting a significant opportunity for Texas Roadhouse to capture a larger share of the market. By improving its digital capabilities, Texas Roadhouse can attract new customers and increase order frequency.
• Menu Innovation and Limited-Time Offers: Introducing new menu items and limited-time offers can attract new customers and drive repeat business. The company can focus on developing innovative dishes that cater to changing consumer preferences and dietary trends. By regularly updating its menu, Texas Roadhouse can maintain its appeal and stay ahead of competitors.
• Loyalty Programs and Customer Engagement: Implementing loyalty programs and engaging with customers through social media and email marketing can enhance customer retention and drive sales growth. The company can offer exclusive rewards and personalized promotions to loyal customers. By building stronger relationships with its customers, Texas Roadhouse can increase customer lifetime value.
• Optimization of Operational Efficiency: Improving operational efficiency through technology and process improvements can reduce costs and increase profitability. The company can invest in automation and data analytics to streamline operations and optimize resource allocation. By enhancing its operational efficiency, Texas Roadhouse can improve its bottom line and maintain its competitive advantage.

What Opportunities Does TXRH Have?

• Expansion into new geographic markets.
• Enhancement of digital ordering and delivery services.
• Introduction of new menu items and limited-time offers.
• Implementation of loyalty programs and customer engagement initiatives.

What Threats Does TXRH Face?

• Increased competition from other casual dining chains.
• Changing consumer preferences and dietary trends.
• Regulatory changes affecting the restaurant industry.
• Economic downturns impacting consumer spending.

What Are TXRH's Competitive Advantages?

• Brand Recognition: Strong brand recognition and reputation for quality and value.
• Loyal Customer Base: Established customer base with high levels of loyalty.
• Franchise Network: Extensive franchise network providing a stable revenue stream.
• Operational Efficiency: Efficient operations and cost management.

What Does TXRH Do?

Texas Roadhouse, Inc. was founded in 1993 in Louisville, Kentucky, by Kent Taylor with the opening of its first restaurant. The concept was built around providing high-quality, affordable steak dinners in a fun, family-friendly environment. Over the years, Texas Roadhouse has expanded its menu to include a variety of American cuisine, such as ribs, chicken, and seafood, while maintaining its focus on steak. The company operates through a combination of company-owned and franchised restaurants. As of December 28, 2021, Texas Roadhouse operated 566 domestic restaurants and 101 franchise restaurants. In addition to the Texas Roadhouse brand, the company also operates Bubba's 33, a sports restaurant concept, and Jaggers, a fast-casual restaurant. Texas Roadhouse has grown to become one of the largest steakhouse chains in the United States, known for its hand-cut steaks, made-from-scratch sides, and fresh-baked bread. The company's restaurants are designed to create a lively and engaging atmosphere, often featuring line dancing and peanut shells on the floor. Texas Roadhouse continues to expand its presence both domestically and internationally, focusing on maintaining its core values of quality, service, and value.

What Products and Services Does TXRH Offer?

• Operates casual dining restaurants under the Texas Roadhouse brand.
• Franchises restaurants under the Texas Roadhouse brand.
• Operates Bubba's 33 sports restaurants.
• Operates Jaggers fast-casual restaurants.
• Provides a steak-focused menu with a variety of American cuisine.
• Offers hand-cut steaks, made-from-scratch sides, and fresh-baked bread.
• Creates a lively and engaging atmosphere in its restaurants.

How Does TXRH Make Money?

• Generates revenue through sales at company-owned restaurants.
• Collects franchise fees and royalties from franchised restaurants.
• Focuses on providing high-quality food and service at affordable prices.
• Maintains a balance between company-owned and franchised locations to drive growth.

What Industry Does TXRH Operate In?

Texas Roadhouse operates within the competitive restaurant industry, which is characterized by changing consumer preferences and economic conditions. The casual dining segment, in particular, faces pressure from fast-casual restaurants and evolving dining trends. Texas Roadhouse differentiates itself through its focus on quality steaks, value pricing, and a lively atmosphere. The industry is also influenced by factors such as food costs, labor costs, and regulatory changes. Texas Roadhouse's ability to manage these factors and maintain its brand reputation is crucial for its continued success.

Who Are TXRH's Key Customers?

• Families seeking a casual dining experience.
• Individuals looking for affordable steak dinners.
• Sports fans who enjoy the atmosphere of Bubba's 33.
• Customers seeking a fast-casual dining option at Jaggers.

TXRH Valuation & Market Position

With a $12.9B market cap, Texas Roadhouse, Inc. sits in the large-cap segment of the market. Relative to its peer group, TXRH's quantitative score of 65/100 is roughly in line with the peer average of 72/100.

FY2026 estForward Outlook

Wall Street analysts project Texas Roadhouse, Inc. revenue of about $6.54B for fiscal 2026, with EPS near $6.43. The estimate reflects 20 contributing analysts.

F-Score 5/9Financial Health

Texas Roadhouse, Inc.'s Piotroski F-Score is 5/9, a 9-point checklist of profitability, leverage and efficiency — a middling fundamental profile. Its Altman Z-Score of 6.41 places it in the safe zone, indicating low near-term bankruptcy risk.

ROE 28%Key Financial Metrics

Return on equity for Texas Roadhouse, Inc. stands at 28.2%, a gauge of how efficiently it converts shareholder capital into profit. Return on assets is 11.6%, showing how much profit it generates from its asset base. TXRH trades at a trailing price-to-earnings ratio of 28.21, below the Consumer Cyclical sector average of ~37x. Its free cash flow yield is 2.9%, a gauge of the cash the business throws off relative to its market value. A current ratio of 0.46 means current liabilities exceed short-term assets, a liquidity point worth watching. Its earnings yield is 3.4%, the inverse of the P/E and a quick read on earnings relative to price.

Net sellingInsider Activity

Over the past six months, Texas Roadhouse, Inc. insiders filed 27 SEC Form 4 transactions — 20 sales and 7 purchases. On net that is roughly 9K shares disposed (about $4.4M), a signal worth weighing alongside the fundamentals.

TXRH Financials

TXRH Latest News

TXRH Analyst Consensus

TXRH MoonshotScore

TXRH Consumer Cyclical Stock FAQ

Disclaimer: This content is for informational purposes only and does not constitute investment advice. Always do your own research and consult a financial advisor.

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