Texas Roadhouse (TXRH) Stock Forecast & Price Target

Texas Roadhouse is supported by exceptional core-banner execution, with 2Q26 company-owned same-store sales up 6.2% and traffic up 3.0%, while 3Q26 QTD comps also ran 6.2% through the first five weeks. Revenue of $1.680 billion, restaurant-level margins of 16.4%, Adj. EBITDA of $201.1 million, and Adj. EPS of $1.85 all came in above estimates, reinforcing strong operating leverage and disciplined cost control. The outlook stays positive because management lowered FY26 commodity inflation to about 5%, maintained positive comparable sales and 5% to 6% store-week growth, and still sees a long-term target of approximately 900 restaurants, with off-premise To-Go sales per week up about 15.0% year over year.

Texas Roadhouse is well positioned on the surface, but the bearish case centers on margin vulnerability from persistent food and labor inflation, especially beef, which makes up about 50% of its food basket. Even with 2Q26 revenue of $1,680.0 million and comparable sales up 6.2%, the company is relying on modest menu pricing, while a roughly 75 bps 4Q comp headwind from holiday shifts and a still-negative mix trend show how quickly sales momentum can be pressured. The longer-term outlook is also constrained by a mature, highly competitive casual-dining market and execution risks tied to unit growth, including cannibalization, new-store inefficiencies, and scaling challenges.