Texas Roadhouse, Inc. - A Speculative Analysis (NYSE: TXRH)

# Introduction: Welcome back to my weekly stock analysis. Disclaimer: I am not invested in this one. Texas Roadhouse, Inc. (NYSE: TXRH) Sector: Restaurants (Consumer Cyclical) ## Company Strengths & Risks: Texas Roadhouse is a steakhouse specializing in Texan and Southwestern style cuisine. Texas Roadhouse operates in 49 US states and 10 international countries. TXRH is based out of Kentucky and is well known for its complementary peanuts and bread. Strengths: - Strong revenue growth - Nice dividend growth - low payout ratio Risks: - Negative FCF/share - weak to pandemics - supply chain issues may cascade - Low yield ## Financial History and numbers TXRH: Numbers from [Seeking Alpha](https://seekingalpha.com/symbol/TXRH/dividends/dividend-growth) as of Jan 03, 2022 Numbers from [Macro Trends](https://www.macrotrends.net/stocks/charts/TXRH/Texas/revenue) as of Jan 03, 2022 Stock | TXRH -----------------------------|-------- P/E Ratio | 26.06 Stock price | $89.28 Current Annual Payout/Share | $1.2 Yield | 1.34% 5 Yr Div Growth Rate | 9.57% 3 Yr Div Growth Rate | 6.27% 1 Yr Div Growth Rate | 21.21% Years Of Growth | 1 (stopped due to covid, would have been 10) Current Payout Ratio | 35.03% Free Cash Flow / Share | -1.1271 Revenue (ttm) | 3.207B Debt / Equity Ratio | 0.1758 Debt / EBITDA | 0.50398 EPS | 3.43 ROI | 3.40% ROA | 8.80% These are numbers that make me look closer and prepare for a pullback. The returns don't seem good right now, but the cards seem to align for recovery once covid-round 4- ends. Just looking at revenue, ebitda and EPS, the trend upwards seems to be resuming after the quarantine. TXRH also has the benefit of low debt ratios. I will now use the 3 year dividend growth rate to project further. Year | TXRH ------------------------| ------- 2022 | 1.28 2023 | 1.36 2024 | 1.44 2025 | 1.53 For another way, let's use historical payout ratio to project out. YEAR | TXRH ----------------------- | ------ EPS estimate 2021 | 9.21 EPS estimate 2022 | 12.71 2021 dividend | 3.23 2022 dividend | 4.45 ## Final Thoughts: I believe there will be a strong sell-off before TXRH rebounds. Nothing about that statement should be controversial. But I do wish to list out some concerns that I have. The first issue is food supply and inflation issues. Sure, every restaurant may face these but I underestimated the duration of struggle, to the point where I have noticed Wendys, Burger King, Chipotle, Taco Bell, and other fast food restaurants temporarily remove items due to supply issues. The second issue is if lockdowns return. TXRH suffered massively due to the initial lockdown. This is not to mention that future pandemics may also hurt massively. This all said, I still think TXRH will recover despite heading for a nosedive. For further research, I advise looking into the COO and the separation agreement change and the reasonings behind TXRH’s strong sell rating. Weekly price estimate for a future date, via consulting the crystal ball: Predicted price for TXRH for Jun 20, 2022: $84.61. There is no factual basis that I will give. I hope someone out there found this post interesting. Please supplement this with your own research. Thank you for reading, please give me feedback so that I can increase my standards for future analysis posts. If I have made a mistake, please correct me. Or if you have one that you want an analysis on, I might pick a comment to do an analysis of if I don't have any spice stored for the week.

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Texas Roadhouse, Inc. - A Speculative Analysis (NYSE: TXRH)

bullish

# Introduction:

Welcome back to my weekly stock analysis. Disclaimer: I am not invested in this one.

Texas Roadhouse, Inc. (NYSE: TXRH)

Sector: Restaurants (Consumer Cyclical)

## Company Strengths & Risks:

Texas Roadhouse is a steakhouse specializing in Texan and Southwestern style cuisine. Texas Roadhouse operates in 49 US states and 10 international countries. TXRH is based out of Kentucky and is well known for its complementary peanuts and bread.

Strengths:

- Strong revenue growth

- Nice dividend growth

- low payout ratio

Risks:

- Negative FCF/share

- weak to pandemics

- supply chain issues may cascade

- Low yield

## Financial History and numbers

TXRH:

Numbers from [Seeking Alpha](https://seekingalpha.com/symbol/TXRH/dividends/dividend-growth) as of Jan 03, 2022

Numbers from [Macro Trends](https://www.macrotrends.net/stocks/charts/TXRH/Texas/revenue) as of Jan 03, 2022

Stock | TXRH

-----------------------------|--------

P/E Ratio | 26.06

Stock price | $89.28

Current Annual Payout/Share | $1.2

Yield | 1.34%

5 Yr Div Growth Rate | 9.57%

3 Yr Div Growth Rate | 6.27%

1 Yr Div Growth Rate | 21.21%

Years Of Growth | 1 (stopped due to covid, would have been 10)

Current Payout Ratio | 35.03%

Free Cash Flow / Share | -1.1271

Revenue (ttm) | 3.207B

Debt / Equity Ratio | 0.1758

Debt / EBITDA | 0.50398

EPS | 3.43

ROI | 3.40%

ROA | 8.80%

These are numbers that make me look closer and prepare for a pullback. The returns don't seem good right now, but the cards seem to align for recovery once covid-round 4- ends. Just looking at revenue, ebitda and EPS, the trend upwards seems to be resuming after the quarantine. TXRH also has the benefit of low debt ratios.

I will now use the 3 year dividend growth rate to project further.

Year | TXRH

------------------------| -------

2022 | 1.28

2023 | 1.36

2024 | 1.44

2025 | 1.53

For another way, let's use historical payout ratio to project out.

YEAR | TXRH

----------------------- | ------

EPS estimate 2021 | 9.21

EPS estimate 2022 | 12.71

2021 dividend | 3.23

2022 dividend | 4.45

## Final Thoughts:

I believe there will be a strong sell-off before TXRH rebounds. Nothing about that statement should be controversial. But I do wish to list out some concerns that I have.

The first issue is food supply and inflation issues. Sure, every restaurant may face these but I underestimated the duration of struggle, to the point where I have noticed Wendys, Burger King, Chipotle, Taco Bell, and other fast food restaurants temporarily remove items due to supply issues.

The second issue is if lockdowns return. TXRH suffered massively due to the initial lockdown. This is not to mention that future pandemics may also hurt massively.

This all said, I still think TXRH will recover despite heading for a nosedive. For further research, I advise looking into the COO and the separation agreement change and the reasonings behind TXRH's strong sell rating.

Weekly price estimate for a future date, via consulting the crystal ball:

Predicted price for TXRH for Jun 20, 2022: $84.61. There is no factual basis that I will give.

I hope someone out there found this post interesting. Please supplement this with your own research.

Thank you for reading, please give me feedback so that I can increase my standards for future analysis posts. If I have made a mistake, please correct me. Or if you have one that you want an analysis on, I might pick a comment to do an analysis of if I don't have any spice stored for the week.

read-time
3 min
94.00
Target Price
6/ 10
Confidence
2-6 Months
Timeframe
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