Texas Roadhouse
TXRH
$200.12
-1.84%
Texas Roadhouse, Inc. operates a chain of casual dining restaurants, primarily under the Texas Roadhouse brand, offering steaks, ribs, seafood, and other American fare. As a leading player in the casual dining segment, the company differentiates itself through its value-priced, full-service experience and strong brand loyalty. The current investor narrative centers on the company's ability to capitalize on a consumer shift toward value-oriented sit-down dining, as evidenced by recent industry commentary highlighting casual dining's resurgence. With a market cap of approximately $13.7 billion and a workforce of over 101,000, Texas Roadhouse is a significant player in the restaurant industry, and its stock performance reflects optimism about its growth trajectory and operational execution.…
TXRH
Texas Roadhouse
$200.12
Related headlines
Investment Opinion: Should I buy TXRH Today?
Based on the analysis, Texas Roadhouse is rated a Buy, supported by its strong revenue growth (12.8% YoY), robust profitability (ROE 27.8%), and positive analyst sentiment (consensus Buy, average target $217.74). The stock offers a 6.5% upside to the average target, and its low beta (0.80) provides a defensive tilt. The company's ability to generate free cash flow ($361M TTM) and its dividend yield (1.62%) add to its appeal. However, the premium valuation (27.4x PE) and high debt levels warrant caution, and the rating would be downgraded to Hold if revenue growth falls below 10% or if the PE exceeds 30x.
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TXRH 12-Month Price Forecast
The AI assessment is bullish on Texas Roadhouse, driven by its accelerating revenue growth, strong profitability, and favorable industry tailwinds. The stock's premium valuation is justified by its superior returns, but the medium confidence reflects uncertainty around margin sustainability and competitive pressures. Key factors to monitor include same-store sales growth, labor cost trends, and the company's ability to maintain its growth rate. An upgrade to high confidence would occur if revenue growth exceeds 15% and margins expand, while a downgrade to neutral would be triggered by decelerating growth or margin compression.
Wall Street consensus
Most Wall Street analysts maintain a constructive view on Texas Roadhouse's 12-month outlook, with a consensus price target around $217.74 and implied upside of +8.8% versus the current price.
Average Target
$217.74
0 analysts
Implied Upside
+8.8%
vs. current price
Analyst Count
—
covering this stock
Price Range
$125 - $276
Analyst target range
Texas Roadhouse is covered by 23 analysts, with a consensus recommendation of 'Buy' and a mean recommendation score of 2.14 (where 1 is Strong Buy and 5 is Sell). The average target price is $217.74, implying a 6.5% upside from the current price of $204.48. The distribution of ratings is bullish, with recent actions from firms like Deutsche Bank, TD Cowen, and Guggenheim reiterating Buy ratings, while RBC Capital upgraded from Sector Perform to Outperform. The target price range spans from a low of $125.00 to a high of $276.00, indicating a wide dispersion in expectations. The high target of $276 suggests that some analysts see significant upside potential, likely driven by continued revenue growth and margin expansion, while the low target of $125 implies concerns about potential headwinds such as labor costs or competition. The wide range reflects uncertainty about the company's future performance, but the overall sentiment remains positive, with most analysts recommending buying the stock.
Bulls vs Bears: TXRH Investment Factors
Texas Roadhouse presents a compelling growth story with accelerating revenue (12.8% YoY) and strong profitability (ROE 27.8%), supported by a favorable casual dining tailwind. However, the stock trades at a premium valuation (27.4x PE) and carries notable leverage (D/E 1.29), which could amplify downside risks. The bull case is currently stronger, given the company's operational momentum and analyst consensus, but the key tension lies in whether the premium valuation can be sustained as growth normalizes. If revenue growth decelerates or margins compress, the stock could face multiple compression, making the valuation the pivotal factor in the investment debate.
Bullish
- Revenue growth accelerating to 12.8% YoY: Q1 2026 revenue reached $1.633B, up 12.82% YoY, with sequential growth from $1.482B in Q4 2025. This acceleration is driven by casual dining's resurgence as consumers shift from fast-casual to value-priced sit-down options, a trend highlighted in recent industry news.
- Strong profitability with 27.8% ROE: Texas Roadhouse boasts a return on equity of 27.76%, well above the industry average, and a net margin of 6.90%. This superior profitability justifies its premium valuation and reflects efficient operations and strong brand loyalty.
- Analyst consensus Buy with 6.5% upside: 23 analysts rate the stock a Buy (mean score 2.14), with an average target of $217.74, implying 6.5% upside from $204.48. Recent upgrades from RBC Capital and reiterations from Deutsche Bank and TD Cowen reinforce positive sentiment.
- Low beta of 0.80 offers defensive tilt: With a beta of 0.797, TXRH is less volatile than the market, providing a defensive characteristic in a consumer cyclical sector. This makes it attractive for investors seeking growth with lower market correlation.
Bearish
- Valuation premium at 27.4x trailing PE: TXRH trades at 27.4x trailing earnings, a 24.5% premium to the industry average of 22x. This premium is near the upper end of its historical range (17.5x-34.6x), leaving limited room for multiple expansion and increasing vulnerability to earnings disappointments.
- High debt-to-equity ratio of 1.29: The company's debt-to-equity ratio stands at 1.29, indicating significant leverage. While manageable given stable cash flows, this could constrain financial flexibility if interest rates rise or operations underperform.
- Low current ratio of 0.50 raises liquidity concerns: A current ratio of 0.50 suggests potential short-term liquidity pressure, as current liabilities exceed current assets. This could be a red flag for investors focused on balance sheet strength, though the restaurant industry often operates with negative working capital.
- Relative underperformance vs S&P 500: Despite a 17.56% 1-year gain, TXRH underperformed the S&P 500's 20.48% return, with relative strength of -2.92%. This suggests the stock may lack momentum compared to broader market, potentially due to sector rotation or valuation concerns.
TXRH Technical Analysis
Texas Roadhouse is in a strong uptrend, with the stock price at $204.48 as of August 21, 2026, up 17.56% over the past year. The current price sits at 94.5% of its 52-week range (between $153.83 and $216.30), indicating the stock is trading near its highs, which suggests robust momentum but also potential overextension. The 1-year price change of 17.56% outpaces the S&P 500's 20.48% gain, but the stock's relative strength over the past year is -2.92%, meaning it has underperformed the broader market, though this is partly due to the market's strong rally.
Beta
0.80
0.80x market volatility
Max Drawdown
-20.0%
Largest decline past year
52-Week Range
$154-$216
Price range past year
Annual Return
+14.5%
Cumulative gain past year
| Period | TXRH Return | S&P 500 |
|---|---|---|
| 1m | -2.3% | +4.1% |
| 3m | +10.8% | +1.9% |
| 6m | +9.4% | +12.4% |
| 1y | +14.5% | +19.3% |
| ytd | +16.8% | +13.1% |
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TXRH Fundamental Analysis
Texas Roadhouse's revenue has been growing steadily, with the most recent quarter (Q1 2026) reporting revenue of $1.633 billion, a 12.82% year-over-year increase. This growth is accelerating, as the prior four quarters showed revenue of $1.482 billion (Q4 2025), $1.436 billion (Q3 2025), $1.512 billion (Q2 2025), and $1.448 billion (Q1 2025), indicating a consistent upward trend. The company's revenue is primarily driven by its Texas Roadhouse segment, with food and beverage sales contributing $1.627 billion in the latest quarter, while franchise fees and royalties add a smaller but stable stream. This growth is supported by the casual dining industry's recovery and Texas Roadhouse's value proposition, which is attracting customers seeking affordable sit-down meals.
Quarterly Revenue
$1.6B
2026-03
Revenue YoY Growth
+12.8%
YoY Comparison
Gross Margin
13.1%
Latest Quarter
Free Cash Flow
$360634999.0B
Last 12 Months
Revenue & Net Income Trends (2 Years)
Revenue Breakdown
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Valuation Analysis: Is TXRH Overvalued?
Given that Texas Roadhouse is profitable, the primary valuation metric selected is the price-to-earnings (PE) ratio. The trailing PE is 27.40x, while the forward PE is 26.29x, indicating that the market expects earnings to grow slightly, as the forward multiple is lower. The gap between trailing and forward PE suggests modest earnings growth expectations, which is consistent with the company's recent EPS performance. Compared to the industry average, Texas Roadhouse trades at a premium, with a PE of 27.40x versus the industry average of 22x, representing a 24.5% premium. This premium is justified by the company's superior profitability, as evidenced by its net margin of 6.90% and ROE of 27.76%, which are higher than many peers. Historically, the stock's PE has ranged from 17.50x to 34.56x over the past few years, and the current 27.40x is near the upper end of that range, suggesting the market is pricing in optimistic growth expectations.
PE
27.4x
Latest Quarter
vs. Historical
Mid-Range
5-Year PE Range 18x~35x
vs. Industry Avg
N/A
Industry PE ~N/A*
EV/EBITDA
17.4x
Enterprise Value Multiple
Investment Risk Disclosure
Financial risks stem from Texas Roadhouse's elevated leverage, with a debt-to-equity ratio of 1.29, which could strain cash flows if interest rates rise or revenue growth falters. The current ratio of 0.50 indicates potential liquidity tightness, though the restaurant industry's negative working capital model mitigates this concern. Additionally, the company's net margin of 6.90% is modest, leaving limited buffer against cost inflation in food and labor, which could pressure profitability if not offset by pricing power. Free cash flow of $361M TTM provides some cushion, but high capital expenditure for new restaurant openings could reduce flexibility.
FAQ
The key risks include: 1) Valuation risk, as the stock trades at a 24.5% premium to the industry, leaving room for de-rating if growth disappoints. 2) Financial risk from high leverage (D/E 1.29) and a low current ratio (0.50), which could strain liquidity. 3) Competitive risk from value-focused chains like Chili's, which is gaining market share. 4) Macro risk, as a recession could reduce consumer spending on dining out. The most severe risk is a combination of these factors leading to a 25%+ decline toward the 52-week low.
The 12-month forecast is moderately bullish, with a base case probability of 50% targeting $210-$230, a bull case (30%) targeting $230-$276, and a bear case (20%) targeting $154-$180. The base case assumes continued revenue growth of 10-12% and stable margins, aligning with the analyst average target of $217.74. The bull case would require accelerated growth and margin expansion, while the bear case would be triggered by margin compression or a recession. Overall, the most likely scenario is a modest upside to around $218.
Texas Roadhouse is trading at a premium to its peers, with a trailing PE of 27.4x versus the industry average of 22x, a 24.5% premium. This premium is justified by its superior profitability (ROE 27.8% vs. industry) and growth prospects. Historically, the stock's PE has ranged from 17.5x to 34.6x, and the current level is near the upper end, suggesting the market is pricing in optimistic growth. The forward PE of 26.3x indicates modest earnings growth expectations, so the stock is fairly valued to slightly overvalued, but not excessively so.
Texas Roadhouse is a good buy for investors seeking a growth stock with a defensive edge, given its 12.8% revenue growth and 27.8% ROE. The stock offers a 6.5% upside to the average analyst target of $217.74, and its low beta (0.80) provides stability. However, the premium valuation (27.4x PE) and high debt (D/E 1.29) mean it's not without risk. It's best suited for those with a long-term horizon who can tolerate some volatility, and it's a buy on any pullback toward $190.
Texas Roadhouse is better suited for long-term investment, given its consistent growth, strong brand, and defensive characteristics (beta 0.80). The stock's low volatility and dividend yield (1.62%) make it a good hold for 3-5 years, allowing investors to benefit from compounding growth. Short-term trading is possible, but the stock's premium valuation and sensitivity to earnings reports could lead to volatility. A minimum holding period of 3 years is recommended to ride out market cycles and capture the full growth potential.