Bullish indicating open at $55-$60, IPO prices at $37
Investing.com - Benchmark has reiterated its Hold rating on Texas Roadhouse (NASDAQ:TXRH), an $11.55 billion restaurant chain, following its latest earnings report. According to InvestingPro data, the stock currently trades near its Fair Value, with 17 analysts recently revising their earnings expectations downward.
Texas Roadhouse reported revenues of $1.51 billion for the quarter, exceeding consensus estimates of $1.49 billion. The company posted same-store sales growth of 5.8%, which was 60 basis points above analyst expectations. This performance contributes to the company’s impressive 14.59% year-over-year revenue growth.
Despite the revenue beat, the company faced significant cost pressures. Commodity inflation of 5.2% caused cost of goods sold to increase by 130 basis points year-over-year, 70 basis points above expectations, primarily driven by accelerated beef inflation, which represents 50% of the company’s food basket.
The cost pressures resulted in restaurant-level operating margins of 17.1%, which was 60 basis points below consensus. This led to earnings per share of $1.86 and EBITDA of $197.2 million, falling short of consensus estimates of $1.90 and $203.6 million respectively.
Benchmark cited continuing pressures on beef costs and general concerns about the consumer macroeconomic environment as key factors in maintaining its Hold rating on Texas Roadhouse stock.
In other recent news, Texas Roadhouse reported mixed second-quarter 2025 earnings, with a slight miss in earnings per share (EPS) but a revenue beat. The company posted an EPS of $1.86, falling short of the projected $1.91, while revenue reached $1.51 billion, exceeding the forecast of $1.5 billion. Despite these results, the restaurant chain experienced strong comparable sales growth of 5.8%, with traffic increasing by 4.0%. However, elevated beef costs negatively impacted margins, leading to what some analysts described as "disappointing" earnings results. Stifel maintained a Hold rating with a $188 price target, citing mixed performance. Meanwhile, BTIG raised its price target for Texas Roadhouse to $200, maintaining a Buy rating, despite the earnings miss. Raymond (NSE:RYMD) James reiterated a Market Perform rating, noting that the company’s store margins of 17.1% were below expectations. These developments reflect ongoing challenges and opportunities for Texas Roadhouse as it navigates current market conditions.
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