El Pollo Loco Holdings, Inc. Just Beat Analyst Forecasts, And Analysts Have Been Updating Their Predictions

Last week, you might have seen that El Pollo Loco Holdings, Inc. (NASDAQ:LOCO) released its quarterly result to the market. The early response was not positive, with shares down 6.3% to US$11.96 in the past week. Revenues were US$120m, approximately in line with whatthe analysts expected, although statutory earnings per share (EPS) crushed expectations, coming in at US$0.21, an impressive 26% ahead of estimates. The analysts typically update their forecasts at each earnings report, and we can judge from their estimates whether their view of the company has changed or if there are any new concerns to be aware of. We've gathered the most recent statutory forecasts to see whether the analysts have changed their earnings models, following these results.

See our latest analysis for El Pollo Loco Holdings

Following the latest results, El Pollo Loco Holdings' four analysts are now forecasting revenues of US$490.1m in 2025. This would be a credible 4.1% improvement in revenue compared to the last 12 months. Per-share earnings are expected to climb 19% to US$0.95. Before this earnings report, the analysts had been forecasting revenues of US$493.3m and earnings per share (EPS) of US$0.93 in 2025. The analysts seems to have become more bullish on the business, judging by their new earnings per share estimates.

The consensus price target was unchanged at US$14.00, implying that the improved earnings outlook is not expected to have a long term impact on value creation for shareholders. That's not the only conclusion we can draw from this data however, as some investors also like to consider the spread in estimates when evaluating analyst price targets. Currently, the most bullish analyst values El Pollo Loco Holdings at US$15.00 per share, while the most bearish prices it at US$13.00. With such a narrow range of valuations, the analysts apparently share similar views on what they think the business is worth.

Taking a look at the bigger picture now, one of the ways we can understand these forecasts is to see how they compare to both past performance and industry growth estimates. The analysts are definitely expecting El Pollo Loco Holdings' growth to accelerate, with the forecast 3.2% annualised growth to the end of 2025 ranking favourably alongside historical growth of 2.2% per annum over the past five years. By contrast, our data suggests that other companies (with analyst coverage) in a similar industry are forecast to grow their revenue at 9.6% per year. So it's clear that despite the acceleration in growth, El Pollo Loco Holdings is expected to grow meaningfully slower than the industry average.

The Bottom Line

The biggest takeaway for us is the consensus earnings per share upgrade, which suggests a clear improvement in sentiment around El Pollo Loco Holdings' earnings potential next year. Fortunately, the analysts also reconfirmed their revenue estimates, suggesting that it's tracking in line with expectations. Although our data does suggest that El Pollo Loco Holdings' revenue is expected to perform worse than the wider industry. There was no real change to the consensus price target, suggesting that the intrinsic value of the business has not undergone any major changes with the latest estimates.

With that said, the long-term trajectory of the company's earnings is a lot more important than next year. We have estimates - from multiple El Pollo Loco Holdings analysts - going out to 2026, and you can see them free on our platform here.

You still need to take note of risks, for example - El Pollo Loco Holdings has 1 warning sign we think you should be aware of.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.