Back to top

Bear Of The Day: Texas Roadhouse (TXRH)

Read MoreHide Full Article

Shareholders of Texas Roadhouse (TXRH - Free Report) might have had some indigestion following the most recent earnings report.  TXRH missed the Zacks Consensus Estimate in each of the last two quarters. Despite the near term bad news, there is still growth on top and bottom to look forward to.


Texas Roadhouse is a growing, moderately priced, full service restaurant chain. They offer an assortment of specially seasoned and aged steaks hand-cut daily in every restaurant and cooked to order over open gas-fired grills. They also offer their customers, whom they call their guests, a selection of ribs, fish, chicken and vegetable plates, an assortment of hamburgers, salads and sandwiches.

Recent Quarter

The most recent quarter was a big miss.  The company reported EPS of $0.29 when $0.37 was expected.  That miss of $0.08 translates into a negative earnings surprise of 21%.

The previous quarter was also a miss, but a much smaller one.  The company missed the Zacks Consensus Estimate by a penny or about 2.7%.


Following the miss, the Zacks Consensus Estimate has dropped.  60 days ago the number took at $1.97 for 2017, but has slipped by a dime.  The 2018 number moved from $2.24 to $2.11 over the same time period.


Earnings may not be growing but the top line still shows some growth.  That has allowed the stock to maintain 23x forward earnings multiple.   The price to book multiple of 4.5x is a little high while the 1.6x price to sales multiple is pretty low.  The sector TXRH competes in has recently seen some big M&A so there should be a mild M&A premium priced into shares of TXRH.



The Best & Worst of Zacks

Today you are invited to download the full, up-to-the-minute list of 220 Zacks Rank #1 "Strong Buys" free of charge. From 1988 through 2015 this list has averaged a stellar gain of +25% per year. Plus, you may download 220 Zacks Rank #5 "Strong Sells." Even though this list holds many stocks that seem to be solid, it has historically performed 6X worse than the market.  See these critical buys and sells free >> 

Zacks Restaurant Recommendations: In addition to dining at these special places, you can feast on their stock shares. A Zacks Special Report spotlights 5 recent IPOs to watch plus 2 stocks that offer immediate promise in a booming sector. Download it free »

In-Depth Zacks Research for the Tickers Above

Normally $25 each - click below to receive one report FREE:

Texas Roadhouse, Inc. (TXRH) - free report >>

More from Zacks Bear of the Day

You May Like