Texas Roadhouse (TXRH) Stock Forecast & Price Target

Texas Roadhouse Inc. has demonstrated strong performance metrics, reporting a 4Q same-restaurant sales (SRS) growth of 7.7%, driven by a 4.9% increase in traffic and a 2.8% rise in average check, despite broader industry challenges. The company recorded a remarkable restaurant operating margin (ROM) of 17.0%, up approximately 170 basis points year-on-year, benefitting from sales leverage and effectively managing operating costs and rent as a percentage of sales. Furthermore, with an expansion potential of 900 Texas Roadhouse units and a favorable commodity inflation rate of just 0.3%, the company is well-positioned for sustained growth and profitability.

Texas Roadhouse Inc. is experiencing a downward revision in its financial outlook, with projected menu pricing decreasing from 3.1% in Q1 to 2.3% for the subsequent quarters, leading to a forecasted margin decline of 70 basis points for the year. The company's same-store sales (SSS) growth estimate has been lowered significantly from 5.5% to 3.0% for Q1, reflecting soft industry conditions, particularly in February. Additionally, the labor inflation guidance remains a concern, with expectations set at 4-5%, compounding the challenges reflected in a reduced operating margin estimate for 2025 at 16.7%, down from the prior 17.3%.